Each year I get phone calls from clients around the tax filing deadline asking for advice regarding tax filings. First of all, your attorney likely is not an accountant and certain tax issues need to be discussed directly with an accountant. However, there are some important things to consider when doing your taxes during a separation and/or divorce proceeding.
The first question is how are you going to be filing – married filing jointly, married filing separately, etc. If you are still married on the last day of the tax year then you can file married filing jointly. If you are filing separately, the second question becomes, who will be claiming the children? Typically, the parent who has the children the majority of the time gets to claim the dependency exemption. However, the court has discretion to allocate the dependency exemption to the non-custodial parent wherein it would result in a higher net income to that party. Of course, the parties can always agree to share the dependency exemption, and to do so, they would have to fill out, sign, and file the appropriate federal tax form.
It is important to note that if one party’s income is not documented you should be cautious about signing and filing a tax return with that person. An attorney can prepare an indemnification form to help prevent financial liability, but the Court could possibly hold your spouse to the income reported on the tax return for purposes of support because you signed off on the "income" – meaning your support award could be less.