Divorce and Your Taxes

If you were to ask someone if they were married or single, this would always be a question they would be able to answer with ease and certainty. When it comes to whether you’re married or single for your taxes, however, things aren’t quite that simple.       

Is Your Divorce Final?

If you’ve gotten divorced, you might think that listing yourself as “single” on your taxes is a no-brainer. However, the IRS has some rules in place about whether you qualify as single or not.

For example, whether your divorce is actually final and complete matters. If it is final, it will need to have been finalized by December 31st of the relevant tax year.

Are You Living Apart?

People will also mark themselves as “single” if they’re living apart or separated, but again, the IRS has some tricky rules on this count.

If you’re just living apart on your own terms, then you’re still married according to the IRS. You can only mark yourself as single if you’ve been officially separated via a court order by December 31 of the relevant tax year.

Know the “Whole Year” Rule

If you are actually able to put yourself down as “single” or “head of household” for tax purposes, make sure you understand the “Whole Year” rule. Under this rule, if you get officially divorced or separated at any time within a given tax year, even if it’s on the very last day of the year, you are legally counted as “single” or “head of household” for the whole year. You can’t file jointly for part of a year and single for another part of it.

File Jointly When it Makes Sense

If you and your spouse are planning on getting divorced, you might be tempted to distance yourself from one another as much as possible.

However, in some cases, it may be smart to go ahead and file jointly while you still can since it will raise your standard deduction significantly. Do your research, though, to see whether filing together or separately makes the most sense for you.

Still confused about how to file? Or, maybe you just want to ensure you choose the absolute best filing status for you and your needs. Whatever the case may be, remember that professional tax help is always a good idea.