How Do Couples File Taxes While Divorcing?

The tax impact of a divorce can be quite substantial for both spouses involved. There are a number of issues that you and your attorney should discuss in an in-depth matter, such as the tax implications for alimony payments on both the receiver and the payer, as well as how tax credits and deductions related to children will be apportioned pursuant to a shared custody situation. But, those issues are all ones that will actually impact your taxes only when the divorce is final. One issue that couples who are separated from one another and pursuing divorce must face in the meantime is how to file their taxes while the divorce is pending. For many earners, this can be a decision with an enormous financial consequence.

You Cannot File as a Single Taxpayer While a Divorce is Pending

After a separation, it can certainly feel like you are single and no longer married, especially when you and your spouse are living apart (and perhaps with new partners) and no longer sharing expenses. But in the eyes of the federal government, you are still married until the day a state court judge makes your divorce final.

Thus, you cannot file as a single taxpayer while your divorce is pending. Your only options are “married filing jointly” and “married filing separately.”

You May Need to Work With Your Separated Spouse to File

The intricacies of the federal tax code are far beyond the scope of this article, but, for many couples, the collective tax burden of both spouses filing “married filing separately” tax returns can be far greater than would be the case if they worked together on one “married filing jointly” tax return (although there are many cases in which this is not true as well).

To give an example, one spouse might file a “married filing separately” return and get a $1,000 tax refund, while the other spouse would file a “married filing separately” return and end up paying $15,000 with the return. Together this is an additional $14,000 payment that would have to be made with the taxes. That same couple, however, had they filed together in a “married filing jointly” return might owe an additional $9,000 in taxes. That’s $5,000 less than they would have had to pay collectively with “married filing separately” returns.

These are just hypothetical numbers, but the point is that you and your separated spouse – even if you cannot agree on anything else – may be able to benefit one another by reaching an agreement, either in conjunction with a settlement agreement or not, to work together on your taxes. Talk to a family law attorney to receive further guidance.

Get Help With Your PA Divorce Matter Today

At The Martin Law Firm, P.C., our family law team works with men and women across Southeastern Pennsylvania in divorce matters, and we are committed to serving your needs in a compassionate and efficient manner. Call us today for a no-hassle consultation regarding any questions you have about divorce in Pennsylvania.

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