Prior to your divorce becoming final, parties to a pending divorce are still considered married in the eyes of the IRS. Therefore, a divorcing couple has two options with respect to filing their income tax returns:
1) the parties can agree to file joint income tax returns; or
2) the parties must file their income tax returns under the status of married, filing separately.
After your divorce is final, you must file an individual return if your divorce was finalized by December 31st, as IRS Publication 504 states that you are considered to be unmarried for the entire year if you obtained your final divorce decree by the last day of the tax year. The determination of which tax status to file your income tax returns is important, as there are pros and cons for each. There are five filing statuses: single; married filing jointly; married filing separately; head of household; and qualifying widow with dependent child. Divorced parents should carefully examine their qualifying status.
To qualify to file as head of household, you must meet the following requirements: You must be unmarried or “considered unmarried” on the last day of the year. To be considered unmarried, you must meet a series of factors, such as whether you paid more than half the cost of keeping up your home for the tax year, and whether your home was the main home of your child, stepchild, or foster child.
For the purposes of divorce, if your final divorce decree is entered by the final day of the year, you are considered unmarried for the whole year and you cannot choose married filing jointly. Additionally, you must also have paid more than half the cost of keeping up a home for the year to qualify for head of household filing status. These costs include (without limitation): payment of property taxes, mortgage interest expenses, rent, utility charges, repairs/maintenance, property insurance, food consumed on the premises and other household expenses. If the total amount paid is more than the amount others paid, you meet the requirement of paying more than half the cost of maintaining the home. Finally, a qualifying person (such as a child) must have lived with you in your residence for more than half the year. Qualifying persons can include: a child, grandchild or certain other relatives who meet certain tests. For the purposes of divorced parents, it is important to note that in certain circumstances, you do not have to claim the child as a dependent to qualify for head of household filing status; for example, a custodial parent may be able to claim head of household filing status even if he or she released a claim to exemption for the child. If you are not sure whether you qualify, you should consult a tax professional or IRS publications for additional information.
Elisabeth R. Feeney, Esq.
