When it gets toward the end of the year, some of us start thinking about filing taxes and thinking about whether we will have to make additional payments or are we going to be getting some money back? If you or your spouse is considering filing for divorce as well (two pleasant topics), then that begs the question of whether you can file joint taxes at the end of the year or whether you can/must file individual returns once you file. Divorce is a complicated area of the law that can sometimes be counterintuitive, please do not hesitate to contact us via our online form or calling (248) 608-4123 to schedule a consultation if you have questions.
If I File for Divorce Before the End of the Year, Can We Still File a Joint Tax Return?
If you have filed for divorce but you are not yet divorced (this means that the judge assigned to your case has actually signed the Judgment of Divorce and filed the signed Judgment with the court register), then you may file joint tax returns. If you get divorced before the end of the year, even if the judge signs the judgment on December 31, you must file separate individual tax returns. It should be noted that there is a sixty day waiting period in Michigan where the courts cannot grant a judgment of divorce that begins on the date you file a complaint for divorce and in most cases it takes at least six months to finalize a divorce. This means you will probably still be married at the end of the year in which you file for divorce unless you file relatively early in the year.
Do I Have to File a Joint Tax Return With My Spouse if the Divorce is Not Final by the End of the Year?
The answer is no, but that might not be a wise decision. The Judge cannot order parties to file a joint tax return, however, in many cases where the parties have been married for most or all of the year, the courts will order that the parties equally divide any tax refunds or equally pay any deficiency. It is generally more tax advantageous for the parties to file jointly and this is encouraged. If one party files separately without the agreement of the other party in an attempt to snatch a refund, the court can order that party to reimburse the other party for their share of the refund as well as for the loss of the tax benefits that they would have obtained by filing jointly. This means if one party plans to file individual returns before the divorce is final, that party should obtain the written agreement of the other party.
In some cases, where one spouse has taken actions that will have a negative tax impact on both spouses, the court may determine that the innocent spouse should be allowed to file separately and be indemnified by the other spouse for any tax liability associated with those actions. If this is an issue in a case, then it must be brought to the attention of the divorce court in order to properly address the issue and protect the innocent spouse as much as possible. In most cases where the parties can at least get along with regards to saving money on taxes, it makes sense to file a joint tax return. In some cases where the judge would otherwise have signed a judgment of divorce shortly before the end of the year due to the way in which the case is scheduled, the court may be willing to hold onto the proposed judgment and sign it after the first of the year so that the parties may still file jointly for the tax benefits associated with the same.
There is quite a bit of flexibility in how the court may handle these matters, if you have questions about divorce or legal separation and how that will impact your financial future, please contact us to schedule a consultation through our website or by calling (248) 608-4123.