1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. Marriage /
  5. Key Tax Tips When Filing for Divorce or Separation

Key Tax Tips When Filing for Divorce or Separation

Updated for Tax Year 2017


OVERVIEW

Going through the process of divorce or separation is a trying time for any couple. Between dividing up property, legal proceedings and handling child custody, many people can forget the tax implications as well. You can avoid missteps with the IRS —especially if there's a breakdown in communication between spouses — by keeping in mind a few tax tips.


 

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change next year for your 2018 taxes, but won’t impact you this year. Learn more about tax reform here.

Choose the right filing status

Asian woman working on laptop computer

You may consider your marriage over the minute your spouse moves out of the house, but in most circumstances, the IRS continues to treat you as a married person as long as you are still legally married on the last day of the tax year for which the return is due. Usually, unless you have a final divorce decree in hand, you can't file as unmarried or head of household, even if your spouse doesn't live with you.

In most circumstances, you have only two options while divorce or separation proceedings are pending:

  • File as a married person jointly with your spouse.
  • File as a married person separately.

In some cases, spousal communication has broken down so you have no choice but to file a separate tax return. Or, you may suspect your spouse of underreporting income to the IRS to avoid revealing the true income in the divorce action.

Usually, signing a joint return makes both spouses liable for the underreporting of taxes and penalties, so you may choose to file separately to avoid this potential problem.

Married couples filing separately often lose access to key credits and deductions that lower tax liability, including:

  • Tuition and fees deduction
  • Hope or Lifetime Learning Educational Credits
  • Student loan interest deduction
  • Child and Dependent Care Credit
  • Earned Income Credit

File under your married name

Although you may be itching to ditch your married name or to remove that hyphen, doing so on your tax return before your name is legally changed may delay your tax refund.

The IRS checks your name against your record at the Social Security Administration (SSA). If your tax return is due and your name has not been legally changed, file under your married name until your name change is official.

Once you are ready to change your name, notify the SSA of your name change, if any. Then, you can use your new name to file tax returns.

Decide who claims the children

If you decide to file a separate return, try to decide up front with your spouse who claims the dependent exemption for the children. A parent with sole physical custody is typically entitled to claim the child's exemption.

But, if your spouse hasn't moved out of the house yet, some confusion may arise regarding who is entitled to the exemption. It can become even more confusing with joint custody arrangements. It’s best to agree who will claim the child or children ahead of time.

You may also agree to assign the child's exemption to the "non-custodial" parent who doesn't have custody using IRS Form 8332 for a variety of reasons, including if the tax benefits are better because your spouse has a higher income.

Claiming a child's exemption on more than one tax return typically flags the returns in the IRS database and will often trigger an audit of both parents' returns.

Don't classify interim support as alimony

Although you may have moved out of the family home or filed for divorce, any payments you made to support your spouse before the divorce is final are not considered alimony by the IRS unless they are pursuant to a court order and specified as alimony.

Alimony payments are typically tax deductible by the person making the payments, and you may feel entitled to some tax benefit as a result of supporting your estranged spouse. However, the IRS only allows the deduction if support payments were outlined in a written separation or divorce agreement.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $59.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

* Important Offer Details and Disclosures
  • TURBOTAX ONLINE/MOBILE

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Absolute Zero $0 federal (forms 1040EZ/1040A) + $0 state limited time offer only available with TurboTax Free Edition; offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Self-Employed Offer with TurboTax Self-Employed and TurboTax Live for Extension Filers: To receive your complimentary subscription to QuickBooks Self-Employed through 10/31/19, you must pay for your 2017 TurboTax Self-Employed or TurboTax Live return between 4/18/18 and 10/15/18 and sign-in and access your QuickBooks Self-Employed account via mobile app or at https://selfemployed.intuit.com/turbotax at least twice by 12/31/18. You will have the option of renewing your QuickBooks Self-Employed subscription by 10/31/19 for another year at the then-current subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section. See QuickBooks.com for price comparison. Offer not valid for existing QuickBooks Self-Employed subscribers already on a paid subscription.
  • Pays for itself (TurboTax Self-Employed): Estimates based on deductible business expenses calculated at the self-employment tax income rate (15.3%) for tax year 2017. Actual results will vary based on your tax situation.
  • Anytime, anywhere: Internet access required; standard data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Help and Support: Access to a TurboTax specialist is included with TurboTax Deluxe, Premier, Self-Employed and TurboTax Live; not included with Free Edition (but is available as an upgrade). TurboTax specialists are available to provide general customer help and support using the TurboTax product. SmartLook on-screen help is available on a PC, laptop or the TurboTax mobile app. Service, area of expertise, experience levels, wait times, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Advice, Expert Review and TurboTax Live: Access to tax advice and Expert Review (the ability to have a Tax Expert review and/or sign your tax return) is included with TurboTax Live or as an upgrade from another version, and available through October 15, 2018. These services are provided only by credentialed CPAs, EAs or tax attorneys. State tax advice is free. Some tax topics or situations may not be included as part of this service, which shall be determined in the tax expert’s sole discretion. In the event your return is reviewed by a tax expert and requires a significant level of tax advice or actual preparation, the tax expert may be required to sign your return as the preparer at which point they will assume primary responsibility for the preparation of your return. Expert Review [and TurboTax Live] not available on the TurboTax mobile app or when using a web browser on your mobile phone. On-screen help is available on a PC, laptop or the TurboTax mobile app. Service, area of expertise, experience levels, wait times, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Return Access and My Docs features: Included with TurboTax Deluxe, Premier, Self-Employed, TurboTax Live or with PLUS benefits. Access to all tax-related documents we have on file for you is available through 10/31/2019. Terms and conditions may vary and are subject to change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2016 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • #1 rated online tax prep provider: Based on independent comparison of the best online tax software by TopTenReviews.com March 13, 2017.
  • Get tips based on your tax and credit data to help get you to where you want to be: Tax and credit data accessed upon your consent.
  • TURBOTAX CD/DOWNLOAD SOFTWARE

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2016 TurboTax products.
  • Data Import: Imports financial data from participating companies; may require a free Intuit online account. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2016 and higher) and QuickBooks Desktop (2012 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.