As we approach the end of the year, we start getting lots of calls and questions from people who have concerns about the timing of their divorce and how it may impact their tax liability.
This is because federal income tax status is primarily determined by your marital status on the last day of the tax year. In other words, if you are divorced any time on or before December 31, your tax filing status for the year will be single, or in some cases, head of household if you are paying a percentage of costs to support a dependent minor.
If you are still married on December 31, the IRS will view you as being married for the entire year, and you have the option of filing as “married filing separately” or “married filing jointly.”
In the simplest of terms, your tax filing status combined with your taxable income for the year will define your tax liability. But as you are undoubtedly aware, taxes may be a certainty, but they are rarely simple. And when divorce is involved, complications can quickly arise.
For example, spousal support will impact your tax liability. If you are paying spousal support, you can claim a tax break. If you are receiving spousal support, you will have to report it as taxable income. Custody arrangements may play a role in your taxes. If you have primary custody of your children, you can take advantage of head of household status and benefit from a higher tax deduction.
In the final months of the year, the courts begin to become clogged with cases because of an onslaught of people trying to make the December 31 deadline. As a result, delays ensue that often push final judgments out into the new year.
Fortunately, there are a couple of ways that we have helped couples meet the deadline, even late in the year. One option is our Private Judge service. A private judge can process your paperwork and get your divorce completed in a much shorter time than the public courts can typically manage.
In addition, Divorce Helpline can help by drafting a limited judgment that may allow you to terminate your marital status even when you have unresolved issues. Essentially, this judgment declares to the court that you want to proceed with your divorce, and that you will solve outstanding issues later.
If you would like to learn more about options that can help expedite your divorce process in order to establish a date of marital termination prior to December 31, please contact our offices at 1-800-359-7004.