| People going through a divorce often are confused about how to handle tax filings on April 15th. Oftentimes, they will get a filing extension out of confusion, fear, and intimidation. The three options available to individuals going through a divorce is to file jointly, file separately or file separately but pool community income and post separation separate income. If you file jointly, each party is jointly and independently liable for any audit or taxes owed. If there is any refund, the IRS will not split the refund so one must have a written agreement regarding how to handle refund or liability between the spouses. Even though it may appear convenient to continue to file jointly, this approach generally leads to many problems down the road including how to assign taxes owed or refund. If you elect to file separately (filing status of married but filing separately), the IRS will often accept each party’s separate income, deductions and withholding. However, if there was any community income earned during the applicable tax year, this method is not technically correct. The last method requires the parties to file separately but pool community income, deductions, credits and add each party’s separate income, deductions, credits, estimates and withholding. You should always consult your accountant on how to properly file taxes while going through a divorce. Lastly, when in doubt, you can file separately and you can amend later for up to three years. If you file jointly, you cannot amend and file separately. |
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