We all know the expression, nothing is inevitable but death and taxes. Federal and state income taxes are not only inevitable, but complicated by a divorce proceeding. If you and your spouse are in the process of getting divorced, the question arises, how should you file your taxes? According to the IRS, so long as you are married, you must file as married. The choice is whether to file jointly or separately. One spouse cannot force the other to file jointly.

But the situation is trickier once the divorce has been granted. Assume that you were divorced in December. Can you then file jointly for the year, during most of which you were married? No, you must file an individual return for the entire year. The IRS is clear on this, stating in Publication 504 that one is considered to be single or unmarried for the entire year even if divorce was granted on December 31. What are the implications of this rule? When a married couple files a joint return, both spouses are held jointly and individually liable for all interest and/or penalties due on that joint return. It does not matter who earned the income; a spouse who did not earn any income may still be held liable for all due taxes on the other spouse’s earned income. Your Separation Agreement may even specify that your former spouse will be liable for any taxes or penalties due on your joint return, but the IRS under Publication 504 may still hold both parties jointly and individually liable for any amount owed.

What about claiming your child(ren) as dependent(s) on your return after the divorce becomes effective? Only one parent may claim dependency of a child, and there are any number of factors which play into this determination. Child dependency is normally declared in the Separation Agreement. If you and your spouse have more than one child, they may be divided between the households. Your Separation Agreement may specify alternating years as the custodial parent, so that one year you may claim your child, and the next year your ex can claim that child. According to the IRS definition, the custodial parent is the parent with whom the child lived with for a longer period of time during the year, counted by number of nights spent in that parent’s care. What if a child lived an equal length of time with both parents? In such a case, the IRS guidelines state that the parent with the higher adjusted gross income can claim the child as an exemption.

There are many other factors, including the language of the Separation Agreement, as for instance if the Separation Agreement declares that the “noncustodial” parent is supposed to claim the child on his or her tax return? In order to satisfy such an arrangement, the child dependency exemption has to be transferred from the “custodial” parent to the “noncustodial” parent, requiring that several conditions be met for the IRS to accept the change. Obviously, such details need to be worked out in advance with the advice and guidance of an experienced divorce attorney.

Leave a Reply

DISCLAIMER
The information contained in this blog is for educational purposes only and is not legal advice. The use of this Blog does not create an attorney/client relationship between you and the Law Offices of Barry R. Lewis. If you are considering divorce or if you are involved in any legal matter, you should hire an attorney.

Massachusetts Divorce and Family Law
Attorney Barry R. Lewis — Divorce Law Specialist
Locations Throughout Eastern & Central Massachusetts :: 508-879-3262