Getting divorced has numerous financial consequences, including, for most people, a change in how you file your taxes. After your divorce is finalized, you will need to consider your tax filing status, as well as matters concerning claiming your dependents. We want to provide you with more information about divorce and taxes, and to help you understand how getting divorced will affect your plans for filing your taxes in 2020.
Tax Filing Status After You are Separated But Before Your Divorce Is Finalized
For anyone in Michigan who filed for divorce recently or plans to file for divorce soon, it is certainly possible that your divorce will not be finalized before the end of 2019. As such, you will need to determine how you plan to file taxes this coming April if you are separated but not divorced by the end of the year.
According to an article in The Balance, if your divorce is not finalized by December 31, then you are still considered “married” when you file your taxes since you are filing for the tax year that ended on December 31. Similarly, if your divorce is finalized by December 31, then you are considered “single” for the entire 2019 tax year. For example, if you file for divorce next month and your divorce is not finalized until January 2020, you would still be “married” for purposes of taxes filed in 2020 (for the 2019 year).
Even if you are married for the 2019 tax year, should you file a “married filing jointly” or “married filing separately” tax return? Even if you are divorced from your spouse at the time you file your tax returns, as long as your divorce was not finalized by December 31, you are still allowed to file a “married filing jointly” return. For some people, there is a financial benefit to doing so. For example, you may be eligible for a higher standard deduction. At the same time, however, filing jointly would mean that you are both liable for taxes due, which would not be the case if you file a separate return. You should speak with a lawyer about your situation before you file.
Filing as “Head of Household” When You File Taxes
If you and your spouse are officially divorced by December 31, then you will need to change your tax status to “single.” You also may be eligible to file for “head of household” status, but it is essential to keep in mind that only one party from the marriage may claim a child as a dependent for purposes of claiming “head of household” status. The “head of household” is eligible for a higher standard deduction, but there are requirements.
For example, you must have been living separate and apart from your spouse by May 31 of the tax year, and your divorce must have been finalized by December 31. You must also have paid 51% or more of the costs associated with maintaining your home. In addition, you must have a dependent, and you must have the right to claim that dependent on your tax return. For most divorced parents who are filing with “head of household” status, the dependent is a minor child, but it also may be an elderly parent who lives with you and for whom you provide support, for example.
Contact a Divorce Lawyer in Michigan