Should You File Taxes Separately or Jointly During Divorce?

In case your divorce is not yet finalized, you could file joint return if you remain married at the end of a tax year or as of December 31. Both husband and wife must provide consent to this filing. If there is no consent and you are still married, then your options are to file “married filing separately” or “head of household.”  When you check the “married filing jointly” box, it is represented to the tax authorities that you are married. This is valid even if you in reality separated and there remains no court judgment which ends this marital status. Any temporary order that relates to child custody, child support or alimony does not affect the marital status. In case the divorce is regarded as final in December 31, it will not be possible for you to file a joint tax return. In such cases, the filing status will be either “head of household” or just “single.”

Discussion is vital

It is important that you discuss all the advantages and disadvantages of filing joint return with either your attorney or your tax advisor. Generally, but not at all times, if you file jointly, your tax burdens will be lowered. This will depend on you and your spouse’s respective incomes, credits and deductions. Principal disadvantage of joint filing is that both the spouses are severally and jointly liable for taxwes on return. These includes any tax deficiencies, penalties and also interest. You can protect this a little with the Tax Indemnification Agreement. The IRS could also permit relief to the spouse who files taxes jointly. There are three kinds of IRS relief, namely equitable relief, innocent relief and separation of liability.

Domestic partners and the same sex

Registered domestic partners and married couples of the same sex cannot file any kind of joint federal returns under any kind of circumstances. For any couple who reside in a state where same sex marriage remains legal or any marriage equivalent relationship is found could file their joint tax returns.

In case your spouse had consented earlier to joint return but refusing in the present

Many spouses use tax filing statuses as their bargaining tool. This makes sense as both the spouses should consent to file joint return. The California court will desist from ordering any unwilling spouse to file joint return. Only in rare circumstances, IRS may accept joint return that is signed by one spouse. Consult your tax attorney if you want IRS to sign single.

Protecting both spouses while filing joint return during divorce

Ensure that the marital settlement judgment or the agreement or the separate agreement explains how to tackle any refunds or tax liability. In case a refund is to be paid through check, ensure that check is paid to both spouses jointly. This will also be valid in case there is a written agreement of the recipient paying the other for any share the spouse should have. In case direct deposit is the mode of refund, do have it passed through joint account or make a written agreement. There is no requirement share refunds or the tax liabilities equally.

Getting divorced in California can be complicated.  Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.  

Gerald A. Maggio is an experienced Orange County divorce and family law lawyer and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.