There is a lot to consider during the divorce process in California. Besides the emotionally fraught aspects of divorce, there are also intimidating legal processes and the necessity of making new living arrangements and adjusting to a change in financial circumstances.
For most divorcing spouses, how they should file their taxes is the last thing on their minds—at least until the tax deadline approaches and they’re still in the process of their divorce.
The timing of your divorce and tax season are important to consider when deciding how to file. If you’re still legally married on December 31st—the end of the tax year—even if you’ve separated, you can choose to file jointly. If you receive your final divorce decree before December 31st you’ll have to file separately as single or “head of household.”
Filing as Head of Household During a Divorce
There are specific guidelines to determine if you can file your taxes as “Head of Household.” In order to qualify as head of household, you must meet the following standards:
- During the tax year, you paid more than half of your household expenses
- Your spouse must have resided separately for at least 6 months of the tax year
- Your home was the main residence of your child or children for 6 months or more of the tax year
- You can claim an exemption for your child as a dependent
- Your spouse is filing their taxes separately
After your divorce, you may continue filing as head of household if your children spend at least half of the year living in your home and you continue to pay half of the cost of maintaining the home.
Should I File Jointly With My Spouse During a Divorce?
While you have the option to file jointly with a spouse if you’re still legally married on December 31st, you don’t have to choose that option. You may also file “married filing separately;” however, there’s often a tax advantage to filing jointly if both spouses agree to do so. Many divorcing spouses choose to take advantage of the more desirable tax rate for one last year before they finalize their divorce.
If one spouse wishes to file jointly but the other refuses, a judge will not force the resistant spouse to comply.
It’s important to speak to your tax advisor and your divorce attorney before deciding how to proceed during tax filing while in the divorce process. Your attorney can advise you on what’s best in your circumstances, including any potential impacts on spousal support. You should also consider that you may have to have ongoing contact with the ex-spouse in the event of an audit for that year’s taxes.
Does My Tax Filing Status Affect My Temporary Support?
Many divorcing spouses have temporary orders for spousal support paid from the higher-earning spouse to the lower-earner during the divorce process. The way you plan to pay your taxes during your divorce is often one of the key factors in determining the support payments you make or receive. Those spouses receiving the support must claim it as income on their taxes and spousal support payers can claim it as a deduction. If the decision to file taxes separately results in a loss of a significant amount of spousal support it doesn’t work to the benefit of the receiving spouse.
Speak to your attorney and a tax advisor about how to file during your divorce.