As the 2022 tax season kicks off, there are important issues that divorcing parties must consider. First, it is always more beneficial to the family unit for the parties to file taxes married filing jointly. Not only does this permit more net income available to the household but more income in calculating support and a higher standard deduction, as well as a greater refund.
Of course, there are exceptions to filing a joint income tax return. If your spouse is a self-employed wage earner, whether you should file a joint income tax return should be discussed with your attorney. Your decision may affect your division of assets or income used for support.
Tax filing status is based on an individual’s marital status on the last day of the year. If no divorce decree is issued by December 31, the parties are considered married. If the parties are divorced by the end of the year, a party may choose to file as head of household. A spouse may choose the head of the household filing status only if the party is a homeowner for which they have paid more than one-half of the cost of maintaining the property. This includes the mortgage, taxes and insurance.
If the parties are filing separately, the party who has primary physical custody would claim the dependency exemption, unless the parties have negotiated that the noncustodial parent should receive the exemption. By claiming the exemption, the parent also receives the child tax credit. It is important to note, parties should attach a copy of their agreement confirming who may claim the exemption as well as the necessary IRS tax form.
Further, if a joint income tax extension is filed, the parties cannot later file separate returns. But if you file a separate extension, the parties may later elect to file a joint tax return. Parties should always consult with their accountant and attorney in advance of filing their tax returns.