How Divorce Affects Your Taxes

 Posted on January 09, 2015 in Family Law

As a married individual, you have the right to file your taxes jointly with your spouse. This brings various benefits, such as opportunities for greater charitable deductions and a shorter, less stressful filing process.

When a couple begins the divorce process, however, issues related to filing their taxes can arise. Although they are technically still married as they work out the terms of their divorce, many couples find it difficult to discuss how they will file their taxes and avoid doing so. The discussion of tax filing can also become just another headache to work through during a process that is already stressful for both parties.

If your divorce is not finalized by December 31st., you are considered to be married for that year and may file your taxes jointly, separately, or separately while still claiming married status. You may also claim "head of household" status if you qualify.

Head of Household Status

An individual may claim head of household status on his or her taxes if he or she meets the following requirements:

1. He or she lived apart from his or her spouse for six months or longer during the past year;
2. He or she paid more than half of the household expenses that year. This includes rent, mortgage payments, utilities, and food; and
3. He or she had primary custody of the couple's children for at least six months during the past year.

Individuals who file as head of household are taxed at a lower rate than those who do not. They also have access to a wider range of tax brackets to choose from and may claim a larger standard deduction than others.

Filing Taxes Jointly

If you are on good terms with your former spouse and feel you can work together to file your taxes jointly, you may enjoy the following benefits:

• Hope credits;
• Lifetime learning credits;
• The ability to contribute to an IRA;
• The largest possible standard deduction; and
• Child tax credits.

In most cases, couples who opt to file their tax returns jointly owe less money overall than those who opt to file them separately.

Filing Taxes Separately

There are some distinct advantages to filing your taxes separately. The main advantage is that each spouse is responsible only for his or her own tax bill, which means that in cases of tax evasion or other penalties, an individual may not be held accountable for his or her spouse's taxes. In some cases, each individual might be entitled to a larger refund amount if they file separately instead of jointly. This is an issue you should discuss with your accountant prior to deciding how to file your tax return.

Divorce Attorneys in DuPage County

If you are currently going through a divorce or plan to file for divorce in the near future, discuss your taxation rights and obligations with an experienced DuPage County divorce attorney. At Kathryn L. Harry & Associates, P.C., we are here to help you through the divorce process by giving expert legal advice and support. Do not wait to begin working with our team – call us today at 630-472-9700.