New York Family Law Attorneys

Filing Taxes During a Divorce

   By MandelLawFirm

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  •    MandelLawFirm
  •   Divorce

Under normal circumstances, Tax Day falls on April 15th every year.  With COVID-19 (the novel coronavirus) impacting a large portion of the economy right now, the IRS has extended the Tax Day deadline to July 15th.  So, if you haven’t filed your taxes yet, you still have some time.  This also affords the opportunity to determine the right filing status as many face the question of whether you should be filing taxes jointly or separately.

Filing a Joint Tax Return While Divorcing

You are in the midst of your divorce – should you file a joint tax return with your spouse?  The answer is probably yes for most and no for some.   If your ex is a W-2 employee and all the income is basically black/white with no gray, then yes file a joint tax return.  The tax benefits are greater on a joint return than on “married filing separately.”

Filing Taxes Separately While Divorcing

The answer to the question becomes hairy when you know or suspect that your spouse is doing some finagling or not reporting all of his/her income.  When you are not privy to all the finances and suspect that your spouse is not honest, I would advise filing taxes separately.

When you sign a joint tax return, you are “jointly and severally” liable for all taxes due on that return. Additionally, if you sign a joint return, you will be responsible for any additional taxes that may be assessed on audit at a later date unless your Divorce agreement indicates otherwise.

Indemnification Agreements

Another option would be to file jointly but with an indemnification agreement.  An indemnification agreement would mean that your spouse promises to pay all future tax assessments related to that tax return.

If you decide to file jointly and later find out that your spouse was not honest on the return, there is something called the “Innocent Spouse” rule.  However, this rule may be difficult to establish if your tax return shows an understated income while you benefited from a luxurious lifestyle.

Experienced Divorce Attorney in New York

The bottom line is, before you agree to sign a joint tax return, you should have a reasonable understanding whether the income reported on the return accurately reflects your lifestyle.  If there is any doubt, my advice is to file separately and save yourself any possible future problems. The Mandel Law Firm is here to support you through your divorce.  To speak to an experienced attorney, give our office a call at 646-770-3868 or contact us through our website.