taxes and divorceIf you are in the middle of a divorce when tax day rolls around, you may be confused as to your filing options. Married filing jointly? Married filing separately? Single? After all, you and your spouse are no longer together, so the IRS should see things the same way. Right?

Unfortunately, in the eyes of the IRS, your filing status is determined by your marital status on the last day of the filing year. So even if your divorce is finalized on January 2nd, you will have to file as a married person for the preceding tax year.

Usually tax liabilities are lowest when people file a joint return, and many divorcing couples can agree to this. Of course, on a jointly filed return, each party is jointly and severally liable for any taxes, including deficiencies, interest and penalties. If such liabilities exist, it is important for the parties to include that in any settlement negotiations.

However, if one party doesn’t agree to file jointly (for any reason), the courts cannot force him or her to do so. In those cases, the alternative filing statuses available include Married Filing Separately or Head of Household, depending on your circumstances.

When you file as Head of Household (HOH), you are entitled to claim the standard deduction irrespective of what your spouse does with his or her tax return. As HOH, you will likely be taxed at a lower rate than if you filed as Married Filing Separately.

To qualify as HOH, all the following must be met:

  • You must have paid more than half the cost of maintaining your home for the tax year. This includes rent, mortgage, taxes, insurance, utilities, and food.
  • Your spouse did not live with you for the last six months of the tax year.
  • For more than one-half the year, your home was the main home for your child, step-child or foster child.
  • You can claim a dependent exemption for the child.

As with any tax-related issue during divorce, it is important to consult with your attorney and tax professional to discuss the specifics of your situation regarding taxes and divorce.