Many couples in the midst of a divorce will likely be confused about how to file their tax return. Although many splits are sadly not amicable, this is an important time to put aside your differences, sit down with your current or former spouse and cooperate…Just as with every divorce, all tax returns are unique and you should consider consulting with a tax accountant.
1. Do we file jointly or as individuals? The law states that every individual must file according to his or her marital status as of December 31st in any given year. Some parties might consider delaying finality to their divorce until after the New Year so that they may reap the benefits of filing jointly. An agreement should be made in advance as to the refund, or deficiency in this case.
Alternatively, if you are still going through a divorce, you can file “married filing jointly” or “married filing separately.” If there are concerns about income, such as a question about whether or not one party is reporting all income or withholding cash received in an effort to defraud the government, you may want to file separately or obtain indemnification from your spouse’s representation.
2. Who claims the children? Unless there is an agreement or Court Order stating otherwise, the designated primary custodial parent has the right to claim the child, or children. If your divorce is still pending, it may make sense to include a provision that states if the person entitled to claim the exemption will not benefit from the deduction, the other person shall be entitled to make the claim. The most common settlement, as to this issue, is having the parties split the exemptions.
3. How do we divide our assets for tax purposes? For couples in the midst of a divorce, asset division can be complicated. However, for already divorced couples, this would be detailed in the divorce agreement. Reference your prior agreements or Court Orders as to how to split the deductions. Here are some examples:
4. How do we file for different types of support? The three main types of support are alimony, child support and pendente lite support, which is often used to provide for the support of a lower income spouse while the legal process moves ahead:
Tax laws change year after year, and this 2011 tax year is no different, so pay attention to changes that might affect your personal position.
Please keep in mind that when it comes to taxes, since every individual’s income and assets are different, every situation is different.
Consult an R&G Brenner professional today if you need additional help navigating a unique tax situation resulting from a divorce.
Source: The Huffington Post