Many issues are covered when getting divorced or once you are divorced, one that people often forget about or don’t put much thought into is how to file taxes during a divorce action, or what to do after a divorce is final.
When you are married you have various options as to how to file your taxes each year. The purpose of this blog is not to tell you how to file, or the benefits of each type of filing, but more what “can” you do, or what are you allowed to do.
Until there is a order from the court as to how the parties are to file for taxes, you are free to file just as you did while you were married. Each marriage has its own way of dealing with finances including how they file for taxes, and you may continue to do so while a divorce is pending.
Now clearly during the pendency of a divorce, the parties often cannot get along to make any decisions, it has been my experience that usually parties can agree to hand the taxes over to a professional to have them completed. I usually recommend that the tax professional prepare the returns each way possible and that the couple should file them in whatever way will achieve the greatest overall tax benefit to both parties.
While this is how I recommend it be completed it does not need to be done this way. Filing taxes each year is each person’s individual obligation to get completed, and no one, not your spouse, your tax professional, your attorney or even the Judge can “make” you file a joint return with your spouse.
Filing taxes is a federal obligation, and how you decide to file them is based on your personal financial situation. As it is a federal obligation, the state courts do not technically have the authority to require you to file a joint return.
Once you have a Decree of Divorce, it should include how you will deal with ongoing taxes and who gets to claim the minor children. It is common to share equally the tax benefits for the children. If there are an uneven number of children, usually the parties will flip flop who receives the greater number of children on their taxes. For example if there are three children, one party will get to claim two children one year, and then only one the following year.
Additionally Utah law provides that the court may not award a tax exemption for minor children if that party is not current on their child support obligations. It would behoove you to include this in your Decree as well so there is no question as to how it will apply.
Lastly, many parties include a “buy-out” provision which says that if one party would receive a greater benefit than the other in claiming the child(ren) they may pay the other party what they would have received from claiming the child(ren) and then claim them on their taxes. But this is not automatic, you need to include it in your Decree if you want this option.