Divorce, Debt, and Finances

Tips, Struggles and Successes navigating Divorce, Debt and Finances

Divorced this Year-How Will You File Your Taxes?

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April15th is closer than you think and soon it will be time to prepare your taxes.

If you separated from your spouse, or filed for or finalized your divorce there are a few things you need to be aware of when it comes time to file your taxes.

Missing or ignoring these details could cost you, so arm yourself with information to keep the IRS on your good side.

Divorced in 2010-How Will You File Your Taxes?A good place to start is reviewing prior returns.  It is important to save tax returns, but if you were not the spouse who "handled" financial arrangements, such as taxes, you may be clueless as to their whereabouts or how to obtain them.

The good news is that the IRS has records and if your spouse is being difficult you can ask the IRS for them.

The process is fairly simple; all you need to do is contact the IRS and acquire Form 4506. By filling out and returning this form, the IRS can provide you with signed copies of prior returns.

So how will you file? Divorcing your spouse may mean divorcing your filing status.

You have a few options when it comes to filing your taxes and divorce.  

  • Married filing jointly-To be eligible, you and your spouse must be legally married (even if you are living apart) as of the last day of the tax year.  
  • Married filing separately-To be eligible you must still be legally married as of the last day of the tax year.
  • Single-To be eligible you must be legally unmarried or legally separated as of the last day of the tax year and not eligible for "Head of Household" status.
  • Head of Household-To be eligible you must be  a single person who provided more than half of the household maintenance costs and whose household is the principal residence (defined as being more than one half of a year) of at least one dependent. If you are married but have lived physically apart since or prior to July I of the tax year, you will need to use "Married filing separately" status. 

Advantages of filing separately 

  • Separate, individual returns may be amended to form a joint return anytime within three years. A joint return may not be changed into two separate individual returns, so this is a big decision!
  • If you file separately you can't be held accountable if your spouse decided to "fudge" their tax return. Filing jointly holds you accountable for any and all back taxes, interest, and/or penalties involved with that joint return.

Advantages of Filing Jointly

  • Sometimes filing jointly will be the better "financial" choice as there are several credits that can be used. These include child and dependent care credits as well as the earned income credit.
  • By filing jointly you may also gain eligibility for certain deductions, such as the dependency exemption for a non-working spouse or the deduction for a spouse's contributions to an Individual Retirement Account (IRA).

The best thing you can do for yourself is to consult your tax professional about your options and what works best for you.

Always, always, always get the details of your divorce documented in writing. You definitely do not want to mess with the IRS, so be prepared to show proof of all arrangements. 

The IRS provides several resources accessible on their site to help you prepare for filing taxes before, during, and after a divorce. If you still have questions, be sure to check them out!

Publication 504, Divorced or Separated Individuals

Publication 501, Exemptions, Standard Deductions, and Filing Information 

Suzanne Cramer

Suzanne is a certified credit counselor working in our Ask the Expert forums as a coach and a Social Media Specialist for CareOne. Suzanne writes for our Divorce, Debt and Finances and A Straight Talk on Debt blogs.  Follow Suzanne on Twitter where she shares the latest debt industry news and tips to keep your finances in check with her ADivorcedMom and AskCareOne accounts.

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  • Desperate times call for desperate measures--like living with your ex because you can't afford not to. Today's economy has taken its toll on the best of us, leaving some couples unable to physically separate for financial reasons. So how do you make it

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