If you are currently going through a divorce in Arizona, there are some important things that you should know about filing your taxes. You will only be allowed to file a joint income tax return with your spouse for this tax year if you are still married on Dec. 31 and your spouse agrees to file your return jointly for the year. If both of these factors apply, you can check the married filing jointly box on your tax return.
Filing a joint return allows you to a larger exemption than if you file separately or as a single filer. If you are not divorced but are separated at the end of the tax year, you will qualify to file a joint tax return since there will not be a final divorce decree in your case that ends your status as a married person. However, if your divorce is finalized before Dec. 31, you and your spouse will need to file your own separate returns and will not be able to file a joint return.
Filing Taxes While Legally Separated vs. Divorced
If you are legally separated from your spouse but have not received your Decree of Separate Maintenance, you will still be married. The orders that you receive for the division of your property, custody of your children, and child and spousal support will not affect your tax filing status. Since you will not have a final order from the court that ends your marriage, the IRS considers you to be married. However, if you have an order of separate maintenance by the end of the tax year, you can choose to file your tax return as single or as a head of household, according to IRS publication 504. However, if you and your spouse are able to agree to file a joint return, it might be a good idea. Each of you will likely pay higher taxes if you file separate returns.
Talking About How to File Your Tax Return
When you are going through a divorce, both you and your spouse may have trouble talking to each other about anything. It might seem hard to imagine discussing the pros and cons of filing a joint return. It is a good idea for you to talk to your tax preparer and your divorce lawyer about filing a joint income tax return. In most cases, the taxes will be lower for joint returns. However, depending on your deductions, respective incomes, and credits, you and your spouse might be better off filing separate returns.
A major disadvantage of filing a joint return is that you and your spouse will both be liable for taxes that may be owed on the tax return. If your spouse fails to pay his or her portion of any tax liabilities, the IRS will go after you to recover what is owed. You can take steps to protect yourself in the case that your spouse fails to pay his or her portion of the taxes by entering into a tax indemnification agreement with him or her. There might also be some relief available to you from the IRS. There are three types of tax relief that the IRS offers to spouses who have filed joint returns, including the following:
- Innocent spouse relief
- Equitable relief
- Separation of liability
We will discuss tax indemnification agreements and the three types of tax relief that you might be able to claim further below.