It’s that time of year: Tax Time!
Each year, as the dreadful deadline of April 15 approaches, we are confronted with questions from clients about how they should deal with filing taxes. These inquiries are so common we thought it might be beneficial to post a few bits of information in order to highlight some issues that frequently arise. Please note: you should be sure to speak directly with your tax-advisor or attorney for specific advice regarding your tax filings.
Situation A: Separated, but not yet Divorced.
- Do I file jointly or separately?
- Who claims mortgage interest deductions?
- Who claims the children?
These are very good questions. If you have a current custody and/or support order, or a property settlement agreement, be sure to check whether these issues are addressed. It is common for court orders and agreements to address all of these issues, as it makes the process of filing taxes easier on both spouses. It would also be wise to consult the Internal Revenue Service’s website, as it answers a lot of common questions.
It is important to speak with your tax-advisor or attorney before deciding whether to file jointly or separately. Often times, it will make more financial sense to file jointly because of the tax benefits—however, a joint filing can create arguments over how to divide the tax return. It is common for the tax refund to be held in escrow by your attorney until you and your spouse can agree on the division of the refund. If your spouse claims a deduction (i.e. mortgage interest, children) that you believe you might be entitled to, it would be wise to immediately consult an attorney or tax-advisor.
Situation B: Separated part of the year, Final Decree of Divorce entered in the tax year.
- Do I have to file jointly?
- Can I file separately?
Again, great questions. If this situation applies to you, we strongly suggest you refer to the Internal Revenue Service’s website and the Virginia Department of Taxation website. If your divorce was finalized, be sure to double check your divorce decree to determine if these issues are addressed.
Can I be held liable for my soon to be ex-spouse’s tax debt?
Maybe! If your husband or wife has tax debt/liens which you are aware of, be sure to bring this to your attorney’s attention. If you have already filed and the IRS has put you on notice that a portion or all of your tax return will be deducted for your ex-spouse’s tax debt, contact an attorney right away. You should also refer to the Innocent Spouse Relief information through the IRS website. You can apply to be held harmless from your spouse’s tax debt under certain circumstances.
If you have additional questions, please contact the attorneys at BoykoNapier. Our Virginia family law and divorce lawyers handle cases throughout Central Virginia, including Richmond, Henrico, Chesterfield, Hanover and the surrounding communities. Please call us at (804) 658-3418, or contact us via email.