Most married couples file their tax returns using a filing status of married filing jointly because the tax rates are lower, it’s easier and only one tax return is required.
A divorced taxpayer must file as single but in certain cases may use a filing status of head of household and pay the lower rates similar to those that married couples get. The filing status you can choose generally depends on your marital status on the last day of your tax year.
When does my filing status change?
For tax purposes, you are considered unmarried for the entire year (and therefore file as single or head of household) if you have obtained a decree of divorce by the last day of the tax year which is December 31.
You are also considered unmarried if you have obtained a decree of annulment, which holds that no valid marriage ever existed. You must file amended returns for all tax years affected by the annulment. On the amended return you need to change your filing status to single. That’s because an annulment extinguishes the marriage as if your marriage never existed.
You are married for the entire year (and must file Married Filing Separately or Married Filing Jointly) if you are separated but you have not obtained a final decree of divorce by December 31. An interlocutory decree or a pre-decree separation is not a final decree.
If you are married, you and your spouse can choose to file a joint return. If you file jointly, you both must include all your income, exemptions, deductions, and credits on that return. Both you and your spouse must sign a joint tax return, even if you are separated or if a divorce is pending.
If you do elect to file a joint tax return both you and your spouse may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. This means that one spouse may be held liable for all the tax due even if all the income was earned by the other spouse.
After divorce, am I still responsible for joint taxes?
Once you are divorced, you are still both responsible for any tax, interest, and penalties due on a joint return for a tax year which ends before your divorce is final. Both of you are legally responsible even if your divorce decree states otherwise! Therefore, even if your spouse agrees to pay any amounts due on previously filed tax returns, you will be responsible for any payment your spouse fails to make.
Are there any exceptions?
In some cases, a spouse may be relieved of the tax, interest, and penalties on a joint return. There are three types of relief available:
- Innocent spouse relief
- Separation of liability
- Equitable relief
You must meet specific criteria to qualify for any of these three types of relief. A special written request to IRS is necessary. For more information, click here.
An attorney can help you with your divorce to make sure you make the right decisions about dividing your property and your debts to minimize adverse tax consequences. Your attorney will help you select the best tax filing status and make sure that your divorce decree includes protective provisions to avoid your liability for your spouse’s taxes.