How to Handle Your Tax Return During a Divorce

As long as you and your spouse were still married on December 31 of the tax year for which you are filing, you have two options: file as married filing jointly or married filing separately. Whether you file jointly or separately depends on your relationship with your spouse.

Filing jointly lowers your overall tax burden, so the joint return is a good option for those couples whose relationships end amicably. However, filing jointly does open you up to more risk. If your spouse chooses not to pay his or her share of the taxes, you are still responsible for paying the full amount because you filed as one legal entity. Possibilities do exist for legal avoidance of paying your spouse’s share of the taxes if he or she will not, but these options are rare.

On the other hand, although filing separately raises your tax obligation, this option removes your risk if you are uncertain that your spouse will pay or file honestly. Consult your accountant to determine which course of action is right for you.

The presence of children in the marriage can further complicate filing your tax return. Legally, only the custodial parent (that is, the parent with whom the children live) can claim the children as dependents on his or her tax return. In situations in which the non-custodial parent would like to claim the children as dependents, the custodial parent must sign a release form to allow the claim.

No matter what decisions the two parties in the divorce make, filing a tax return should be done carefully. Many opportunities exist for making costly mistakes when filing a tax return during a divorce; even if you have never hired an accountant, consider doing so for every return until the divorce is final.