Options for Filing Tax Returns After Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation; California Divorce MediatorsRecently divorced individuals can often be faced with new challenges and problems that did not exist previously. One of them is tax filing. Married couples can file for tax either jointly or separately. Usually, the tax filing status of couples is done jointly. In California, couples only have the option for joint filing but divorced individuals can do it separately if they obtain a final decree of divorce by the end of the tax year.

If the final divorce decree is obtained before the end of the tax year, each partner has the option of filing the tax return as single or head of household. They follow the same tax rules as legally separated couples.

Filing as head of household

A head of household is a person who is unmarried and takes care of the house expenses. Those who qualify for head of household should file as such because the effective tax rate is lower than those who file as single individuals. It also protects one from joint tax liability that might arise due to the other spouse’s error.

One of the advantages of filing as head of household after divorce is that it does not require the other spouse to itemize things.

Filing joint and separate returns

In California, only married couples are allowed to file a joint return. It may not be applicable for legally separated couples and individuals should check the state tax laws first before filing a tax return. According to federal tax rules, a marriage is one where a legal union exists between two individuals. It does not matter which state the individuals belong to as long as their marriage took place in California. The state law also controls whether couples are legally separated or divorced under separate maintenance decree.

Joint returns can be filed by couples who are legally separated but still married. Separate returns can also be filed by both individuals.

Filing tax returns can be confusing and difficult after a long and tough divorce. It requires the individual to understand the state tax laws and file for returns accordingly. California state laws require couples to file tax returns jointly. Divorced individuals can file separately provided the final divorce decree has been passed by the end of the tax year. Legally separated couples can file jointly or separately. Tax rates can increase or decrease, depending upon how it is being filed and in what condition.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation

Understanding Divorce & Innocent Joint Tax Filer Relief

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation attorneys; California Divorce MediatorsBoth you and your registered domestic partner or spouse assume tax paying responsibility when you file California joint tax return. Responsibility is also assumed for applicable interest and penalties. If you meet a few specific legal requirements, you could qualify for relief from payment of part or all of tax liability.

Traditional Innocent Joint Filer Relief

It is possible to qualify for relief from the assessed additional tax, interest and penalties when you satisfy the following conditions like filing joint tax return. You can enjoy additional relief also when your RDP or spouse’s error is caused by additional tax. Tax breaks can also be had if at the time of signing joint tax return, information was not available to you or you were unaware of those items which resulted in an additional tax. Money can be saved also if all circumstances and facts are taken into account and it would be not fair to hold you totally liable for tax liability. Other conditions of tax breaks include that you have submitted a completed “Request for Innocent Joint Filer Relief” or FTB 705, to the government earlier than two years post date of starting involuntary collection activities from you.

Relief through Separate Allocation of Liability

It is determined, under this kind of relief, which RDP or spouse is going to be liable for assessed additional interest, penalties and tax. In case you meet all the requirements, we assign the liability for the additional tax to liable RDP/spouse. This is treated as if taxpayers had filed two separate tax returns. This kind of relief can be had if the couple files joint tax return. It is important that both the spouses must meet all conditions. These include the case if you divorced and also legally separated from your RDP or spouse or terminated the registered domestic partnership. This is also applicable if the couple lived apart from each other for a period of 12 months before making the relief request.

Relief can also be had when additional tax assessed can be attributed in full or part to the RDP or spouse. It can also be enjoyed if the couple has no information of items which created this tax liability at the time you signed the joint tax return. Other causes include submitting the competed “Request for Innocent Joint Filer Relief” to the authorities earlier than two years post date of starting involuntary collection activities from you.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation