Demystifying Joint Tax Returns in Divorce
If you are the less financially-sophisticated spouse, then the matter of whether to file a joint tax return when you are in the middle of a divorce may create a great deal of anxiety for you.
Every situation is different, but two rules may help quiet your concern.
(1) You can file a separate return and later amend to file jointly.
In general, a person who is married has the choice of filing their tax returns as “married filing jointly” with their spouse or “married filing separately” without their spouse (“head of household” or “abandoned spouse” filing status may also be available in very specific circumstances.) This choice is completely up to you. Although it is often more financially advantageous to file jointly, absent some extreme form of coercion, your spouse can’t make you file a joint return with him or her. If you file separate returns, you have kept your options open to later, when your situation has become more clear, amend and file joint returns with your spouse.
(2) You can file for a 6 month extension by April 15th rather than filing your tax returns at that time.
Although most accountants and financial advisors prefer to have their clients file their returns in a timely fashion, in many circumstances not all of the relevant information has been gathered by the April 15th deadline. There may also be other reasons for not filing your returns by April 15th. A simple form filled out and filed on or before April 15th will enable you to defer the filing of the completed returns. If you have had sufficient withholding from your paycheck or paid sufficient estimated taxes to cover the estimated taxes due, there will be no penalty due for late filing.
The combination of these two rules above suggests a possible course of action if you are not sure whether you want to be exposed to the “joint and several liability” that comes with the filing of a joint return (from unreported income or inappropriately claimed deductions) or if there are other concerns such as who will be responsible for the liability in connection with a joint return. That is, you can file extensions to file your separate Federal and State returns on or before April 15th. If you think it may be quite some time before the final returns can be filed, be sure the taxes you’ve paid in are close to the amount that will be due on your separate returns. Then, later on, when clarity has been achieved, you have the option of amending your return and filing jointly with your spouse.
Of course, you will want the advice of your divorce attorney and/or accountant as you make these decisions. And of course, you will want to have someone who is looking out for your separate interests review the joint returns before you sign them.
So, rest assured that you have options, and that you don’t have to file joint tax returns by April 15th – you can buy some time in order to make the best decision for you.