Tax filing status is a common question asked of divorce attorneys like me and my colleagues – especially toward the end of the year. That said, while this is a popular question, this could be the shortest blog in history because the answer can and should be, simply, “Talk to your accountant!”
While that will be my best advice, there are some rules you will want to know if you have just gotten divorced or if you expect to get your divorce decree in 2023.
The rules are found in IRS Publication 504, “Filing Status,” which states that if you receive a divorce decree before or on December 31, then you are considered an “unmarried person” in that tax year and must file as “single, head of household or as a qualified widow(er).” As such, a person who received their final divorce decree on or before December 31, 2022, cannot file jointly with their spouse for the 2022 tax year. Returns are due Tuesday, April 18, 2023.
This might seem like a no-brainer and it is, but for some couples, it will be a wake-up call. In Pennsylvania, unlike in New Jersey, the process of divorce can take years to complete, especially in complex cases. Even if husband and wife have been separated for years but simply don’t have a divorce decree, they can, and often do, with the advice of an accountant, file as “married filing jointly.” Usually, the filing options available before getting a divorce decree are “married filing jointly” or “married filing separately." Couples choose to file jointly because it generally can result in a lower tax burden to both of them – even if they cannot stand each other.
In short, we’ll begin where we started. After speaking to your divorce lawyer, you should “Talk to your accountant!”
Every case is different and additional complexities of paying and receiving alimony/spousal support can complicate things. Divorced couples also need to plan for the tax implications of taxable assets during a divorce which can result in decisions that need to be made about when you ideally want to get your decree.