If you’re in the middle of a divorce, you may file a joint return only if you are married at the end of the tax year (December 31) and both of you agree to the filing. The box you check on your return is “Married filing jointly.” You qualify as married even if you are separated as long as there is no final court judgment ending your marital status. A temporary order relating to child support, alimony, or child custody does not affect your marital status. However, if the divorce is final as of December 31, you can’t file jointly—your filing status is either “Single” or “Head of household.”
Discuss the pros and cons of a joint return with your tax advisor and your attorney. Usually, but not always, your tax burden will be lower filing jointly, depending on your respective incomes, deductions, and credits. The main disadvantage of filing jointly is that both spouses are jointly and severally liable for taxes on the return, including any tax deficiencies, interest, and penalties. You can protect against this to some extent with a Tax Indemnification Agreement, discussed below. Also, the IRS may allow relief to a spouse who files jointly. The three types of IRS relief (“innocent spouse,” “separation of liability,” and “equitable” relief) are discussed in IRS Publication 971.
Same-sex married couples and registered domestic partners or civil union partners cannot file joint federal returns under any circumstances. Couples living in states where same-sex marriage is legal or a marriage-equivalent relationship is available may file joint state tax returns.
For more information, see our Same-Sex Law topic area.
Tax filing status can be used as a bargaining tool, because in most cases both spouses must agree to file a joint return. A court will not order unwilling spouses to file a joint return. In rare circumstances, the IRS will accept a joint return signed by only one spouse. If you want to ask the IRS to do this, consult a tax attorney.
Make sure that your marital settlement agreement or judgment, or a separate agreement, addresses how you’ll deal with any tax liability or refunds. If a refund will be paid by check, make sure that the check is paid to both of you jointly or that you have a written agreement that the recipient will pay the other person for any share the other spouse is entitled to. If the refund will be made by direct deposit, have it routed to a joint account or prepare a written agreement. You don’t have to share tax liability or refunds equally. You can do whatever is fair and consistent with your overall property division, but whatever you do, have a clear written agreement. One common approach for dealing with taxes owed is to prorate tax liability using a ratio based on each spouse’s income.
If you are going to file taxes jointly and one spouse is responsible for preparing the returns, you should consider entering a stipulation (agreement) regarding tax indemnification. An indemnification agreement says that one spouse will be liable for any amounts due on previously filed joint returns, and protects the spouse who didn’t prepare the return. However, if you have doubts about your spouse’s ability to prepare accurate tax returns, you’re better off filing separately.
You must file either “married filing separately” or “head of household” depending on your circumstances. Filing as head of household allows you to claim the standard deduction even if your spouse itemizes deductions and allows you to claim additional credits such as the dependent care credit and earned income credit. You may also be taxed at a lower rate. For you to be able to file as head of household, all of the following must be true:
• you paid
more than half the cost of maintaining your home for the tax year. Maintaining
a home includes rent, mortgage, taxes, homeowners’ insurance, utilities, and
food eaten in the home.
• your spouse did not live with you for the last 6 months of the tax year.
• your home was the main home of your child, stepchild, or eligible foster child for more than half the year.
• you could claim a dependent exemption for the child.
If you file as head of household, your spouse must file as married filing separately. Once you are divorced you may still file as head of household if you pay more than half the cost of maintaining your home for the tax year and your children live with you for more than half the tax year.
There are a lot of tax issues and financial considerations to be aware of during a divorce. Make sure you take the time to understand these issues. Please see the Divorce & Taxes section of our website.