You've filed the divorce papers and are moving on with your life. Then, tax time rolls around and you aren't exactly sure what to list as your tax filing status. Both your filing status and tax liability depend on the state of your divorce. Complicating matters are situations where the ex still lives with you.
Determining Your Filing Status
According to the Internal Revenue Service, if you receive a final divorce decree by the last day of the tax filing year, your filing status is single for the entire year. For tax-filing purposes, in situations of separation or an un-finalized divorce as of the last day of the tax filing year, you can select married filing jointly or married filing separately. Another option might be filing as head of household, as long as you live separately and otherwise qualify.
Avoid Claiming as a Dependent
In a finalized divorce, you cannot claim an ex-wife as a dependent on your tax return. She is responsible for filing her own taxes and, therefore, you cannot claim her as well.
Calculating Tax Liability
The IRS expects you and your ex-spouse to pay all tax liabilities incurred the previous year. Even if the divorce court appoints specific tax responsibilities to each individual, the IRS may hold you accountable for taxes your ex does not pay. It's essential to clue in your tax professional about your divorce, the stipulations, if any, in the divorce decree, and any decisions you and your ex made regarding tax liability.
Filing with Dependents
In many divorce decrees, dependent claims for tax liability are a component of the final decisions of the court. If there is no explanation within the divorce decree specifically, discuss the options with your ex. In some situations, you may need to seek clarification from the court if you cannot agree on these terms. Both individuals cannot claim the dependents on individual tax returns even if joint custody is in place.
Alimony paid to your ex-wife during the tax filing year is deductible on your income taxes. Your ex-wife must report alimony to the court as income. This may reduce your tax liability as a result.
Reducing Tax Liabilities
Deductions and tax credits may reduce your taxes. In some cases, the court provides specific consideration to which individual may claim a specific tax deduction or credit. In situations involving mortgage interest, child tax credits and medical expenses, the court may determine which individual may claim such deductions for the tax year, even if both parties lived in the same home during that period. If this is not the case, individuals need to work together to make this decision based on who benefits the most from such a claim or seek further clarification from the court.