TurboTax / Tax Calculators & Tips / All Tax Guides / Family / Tax Tips for Separated Couples

Tax Tips for Separated Couples

Updated for Tax Year 2015


OVERVIEW

Separated couples face choices that can have significant tax consequences. Some of these choices can be made independently; others require you to communicate with each other.


Ending a marriage puts both partners on a federal tax path requiring forethought and planning to navigate. In addition to decisions about assets and child custody, separated couples have choices that affect how much they pay Uncle Sam. Some of these choices can be made independently; others require you to communicate with each other.

Legal fees

The Internal Revenue Service offers no deductions for court costs and legal fees for a divorce. It does, however, let you deduct any portions of those fees related to tax advice and alimony. These can include expert counsel on how your separation or pending divorce affects all types of taxes, such as income, property and estate, at all levels of taxation. To take advantage of these potential deductions, you need itemized billing statements from your attorney that clearly identify charges for each service billed.

Filing status

December 31 is an important day for separated couples. The IRS considers you married for the entire tax year when you have no separation maintenance decree by the final day of the year. If you are married by IRS standards, you can only choose "married filing jointly" or "married filing separately" status. You cannot file as "single" or "head of household."

Since the IRS honors the divorce laws of the states, where you live affects your options as well. In Texas, for example, you remain married from a tax perspective until your divorce is final, even though you're legally separated.

Joint return considerations

Your filing status affects your tax rate and determines which credits you can claim. Filing jointly can result in a lower tax bill than filing separately, so the IRS recommends calculating your tax liability as single and joint filers to learn which offers the most savings (TurboTax can help with this, and recommend the best filing status for you).

Filing jointly could pose risks, however, since you share responsibility for any taxes due along with related penalties and interest. That means if your estranged spouse skips out on his or her taxes, you’re responsible for paying them.The IRS may relieve you from your partner's tax debts based on information you provide on Form 8857 Request for Innocent Spouse Relief.

Married filing separately

The IRS acknowledges that filing separately leads to paying more taxes but doing so avoids sharing liability for each other's tax obligation. As married filing separately, you have to agree on taking the standard deduction or itemizing -- if one itemizes, you both must itemize. You must limit itemized deductions such as mortgage interest and property taxes to what you paid as individuals, although you can split any medical expenses paid from a joint account. By filing separately, you lose the ability to claim earned income and higher education tax credits among other breaks the IRS offers.

Legally separated filing options

If tax law considers you "unmarried" because you got a decree of separation maintenance prior to December 31, you can file with "single" or "head of household" status.

"Head of household" requires you to have a dependent and pay at least half of the expenses needed to maintain a home. If your dependent is a child who lives with you more than with your spouse, the IRS considers you to be the custodial parent. Your deductions and credits as custodial parent depend on whether your spouse has agreed to waive his ability to claim the child as an exemption under Box 6a on the 1040 form -- only one of you can claim the child as an exemption. When you can claim the dependency exemption, you can claim child-related credits.

Exemption considerations

If you, as custodial parent, agree to let your spouse claim your child as a dependent exemption, you must sign form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. Your noncustodial spouse must attach it to his tax return. Relinquishing this exemption does not affect your ability to file as head of household or take advantage of tax breaks such as the work-related child care expense deduction, as long as you remain the custodial parent.

Get every deduction you deserve

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

For only $54.99*
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.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Filing Deadline: IRS filing deadline for tax year 2015 is April 18, 2016 (except for residents of Massachusetts or Maine, where the IRS filing deadline for tax year 2015 is April 19, 2016).
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal 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 expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • 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 efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes 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 the TurboTax Home & Business/QuickBooks Self-Employed bundle offers.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. 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 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.