Divorcing couples must file their income taxes as “married” until the divorce is final. The marital status on the last day of the calendar year will determine the filing status for the whole year. For example, if a couple’s divorce becomes final on December 10, 2013, they will file as unmarried on their 2013 taxes. Each will file as either single or head of household, depending on their circumstances.
The two most common issues related to income taxes and divorce include spousal support and child support. In general, spousal support is taxable to the receipt, and deductible by the person paying the support. Child support is not taxable or deductible by either party. However, special circumstances can affect the taxability of both types of support, so a qualified tax professional should be consulted.
Tax issues may also arise when real estate and business interests are transferred or sold as part of the divorce proceedings. Issues may also arise related to audits and unpaid income tax liabilities. When unreported income and unpaid taxes are at issue, innocent spouse relief may come into play. Under the innocent spouse rules, a spouse may be relieved from the tax liability for joint income tax returns when that spouse did not know or had no reason to know about the liability. However, it is difficult to qualify under the innocent spouse provisions, and a qualified tax professional should be retained to evaluate the circumstances.
Tracy L. Coenen, CPA, CFF is a forensic accountant and fraud investigator with Sequence Inc. She specializes in cases of embezzlement, financial statement fraud, white-collar crime, securities fraud, and family law. Visit her website.
I believe you can file as head of household if you and your spouse have not lived together for the last six months of the year. Under this circumstance you are considered “unmarried”. Of course, you need to meet the other head of household tests.