Even if you are in the middle of a divorce, you can still file a joint tax return. According to the IRS, you are still considered “married” if your divorce is not finalized on December 31st of the taxable year (for example, for your 2019 taxes, provided your divorce is not finalized on December 31, 2019, you can file a joint tax return). The IRS does not care if your divorce is “almost” final or you haven’t been living together for years. It is a strict rule, divorced by December 31st – yes or no?
As you may know, most married couples will receive a greater refund or pay less in taxes by filing a joint tax return as opposed to an individual tax return. However, by filing a joint tax return, you open yourself up to whatever tax fraud or under-reporting of income that your soon-to-be-ex may be engaging in.
If you believe that your soon-to-be-ex is engaging in the under-reporting of income or is filing a fraudulent tax return, then you should not file a joint tax return. Although, it was your spouse who engaged in the illegal action, you still might be liable for 50% (or even 100%) of the tax liability and tax penalties. To relieve yourself of liability, you can state that you were an “innocent spouse” and that you should not be held liable for your spouse’s wrongdoing. However, it is very difficult to prove that you were the “innocent spouse” and most of those claims are rejected.
It is important to note, that whether or not your divorce is final, or even if you are in a “happy” marriage, everyone has the option to file a separate tax return — while you are married. You cannot be forced to file a joint tax return. Just be aware, that you most likely will have to pay more in taxes compared to if you filed a joint tax return. This is because some tax deductions, credits, and other benefits are not available or are limited when you file separately.
If you are married, and you are going to file a separate tax return, then you may have to coordinate certain deductions and exemptions with your spouse. For example, if you have children, you will have to decide which spouse will receive the tax exemption for the children. This can be done either by an agreement between both parties or a Court order stating which spouse will receive it. Other examples include who will take the deduction for mortgage interest, real estate taxes and charity.
David Badanes and the Badanes Law Office, P.C. David Badanes and the Badanes Law Office, P.C. have years of experience and can guide you through the divorce process. David Badanes can make sure you make the right decisions, whether it is about your tax returns or other important decisions.
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