How Do I File Taxes During Separation or Divorce?

Getting Separated or Divorced is a tough and troubling time for those involved and tax season adds additional stress. Unless you know the tax laws like a Raleigh CPA, then you are probably unsure what do or how to file your Federal taxes.

Know How to File Taxes During a Separation and After Divorce

divorce, separation and taxe payments in raleigh

Filing your taxes during a separation or divorce can be complicated but, it does not have to be. Filling out the proper legal paperwork and submitting to the IRS early can save you substantially.

Here are some important details about filing taxes during marital separation.

Distinguish if You are Legally Married, Separated or Divorced

Knowing your legal status is paramount to knowing what your financial obligations will be. Single filers have different tax brackets than their married counterparts, and if you file jointly after a final divorce decree, you may find yourself owing the IRS.

Separations offer the most confusing aspect of the divorce and tax process. If no legal decree of separation is issued by the courts, the IRS may still consider you married to your spouse regarding taxes. However, if you have been separated for more than 6 consecutive months, the IRS ‘should’ recognize you as unmarried.

Filing Status

Receiving a final divorce or legal separation allows you more freedom to file. If you have sufficiently declared marital independence from your spouse by December 31st, you may be considered “not married” for the year and can file as Single or Head of Household.

Unless you have been issued a final divorce decree or a legal separation by December 31st of the current calendar year, you will have 2 options for filing.

Married Filing Jointly – offers the benefit of shared tax credits. One spouse claims “head of household.”


Married Filing Separately – One person can claim self as “head of household”

Choosing the Right Filing Status: Is it Better to File Jointly or Separately?

This is a question that only you, your spouse and maybe your attorney and CPA can help with. Ultimately, divorces provide many challenges, both financially and emotionally. Divorces that are contentious are not a good choice for filing jointly. Both parties must work together and often, marital disagreements during this time can really prevent amicable working conditions.

Determine the best option for you and your estranged spouse when filing a Federal tax return by choosing the option that will prevent any IRS audits or further escalate your marital strife.

Filing Jointly

  • Both parties are responsible for any taxes, interest or penalties due
  • Both parties are responsible for any underpayment of tax that may be due
  • If one spouse fails to pay the tax due, the other spouse is likely obligated for the payment

Head of Household

The spouse claiming head of household in a joint return is often afforded a better standard deduction than the spouse filing separately or single taxpayers.

Rules for Establishing Who is the Head of Household

  • To claim head of household, a taxpayer must be legally divorced or be considered unmarried through legal separation by December 31st.
  • The taxpayer must be responsible for more than half the household expenses during the year.
  • A qualifying dependent must have lived in the home for more than 6 months.
    • Child
    • Foster Children
    • Step-Children
    • Elderly

Are There Exceptions to the Rules for the Head of Household?

Any dependents NOT living in the household for more than 6 months must meet the following criteria to allow a head of household status:

  • Children in school – College, boarding schools, private institutions, camps, etc.
  • Business travelers and working abroad
  • Military personnel living away from the home

Filing Taxes Separately

This is the least friendly tax filing option. Filing separate returns as a married couple reduces the tax benefits afforded to married couples. In many cases losses that are claimed on separate filings can be for half the amount that filing jointly can offer.

Child care tax credits and educational benefits can be lost as well.

Options for Filing Taxes Separately

Filing as single or head of household can help you with reclaiming many of the lost deductions and credits, albeit at a lesser rate than the filing jointly counterpart.

Claiming Deductions, Expenses, and Tax Credits

Who Claims the Children?

Typically the parent granted sole custody is awarded the child tax deduction. However, this is not always the case. Establishing who is the sole custodial parent before tax season is a smart decision. Parents who are separated but still living in the same residence can really have difficulty in this area. Speak to a CPA to determine your best course.

Alimony Payments

Alimony payments and how they are claimed and deducted have recently undergone changes due to the passing of the most recent tax law. Read more about how the new tax law affects alimony child support and divorce.

Do You Qualify for Tax Relief?

Unfortunately, divorce is not always an amicable parting of ways, especially when large sums of money are involved. Often, a spouse will agree to a joint filing before the finalization of divorce. If there are any issues or tax fraud with the returns, the IRS offers a “Innocent Spouse Relief” option.

If you qualify, due to the negligence of the filing spouse, during a divorce the Innocent Relief may help you avoid penalties, taxes or interest owed.

You can learn more about Innocent Spouse Relief by visiting the IRS website.

Contact an Experienced Raleigh CPA

Filing taxes is a stressful time and adding the difficulties of divorce can be overwhelming. Local business owners facing divorce are subjected to an enormous amount of red tape. Working with a Raleigh small business CPA can make sure your business assets are protected and if needed, evenly divided.

Give our team at C.E. Thorn, CPA, PLLC a call at 919-420-0092 or by completing the online contact form.