If you are in the process of a divorce or are no longer living with the other parent of your child, there are a few issues related to filing taxes that you should be aware of. Keep in mind, your attorney is not an accountant and cannot/should not give you tax advice.
Before making any decisions, you should always check with an accountant first about any and all tax issues you are unclear on and/or concerned about.
If, like most couples, you have been sharing the same accountant for many years, consider reaching out to a new accountant who can independently and objectively advise you on your tax matters without the concern that they are somehow aligned with the other party. If need a referral for an accountant, your attorney will likely be able to give you some names of people they trust.
Many tax issues pop up this time of year for people who are experiencing family law related issues.
Clients often wonder if they should file Married Filing Jointly, Married Filing Separate or Head of Household. If they file separately, parties question who is eligible to claim the tax credits related to the children. Parties also need to address who will claim mortgage interest and gains and/or losses on jointly titled assets.
Unfortunately, in some cases where communication breaks down and/or tempers flare, parties may not coordinate on these issues and one or both parties rush to file their taxes first in order to claim a credit, gain or loss. This can backfire and cause BOTH parties to get audited. You may be inclined to refuse to file jointly simply because your spouse wants to.
Do not make a reactionary decision based on emotion.
Instead, check with your accountant and your attorney to make sure that your tax filing will be a choice that is well reasoned and calculated to be in your best interest. Not all people who are pending divorce file separately and not all who are still married file jointly.
There are many ways to handle credits, gains and losses equitably pending a divorce. There can be pros and cons for the different types of tax statuses depending on the circumstances of your case. To determine what is going to be in your best interest, consult with your attorney and an accountant before filing your taxes to ensure that your tax return doesn’t become a decision you regret later on.