As you know, April 17 is fast approaching and federal and state income tax returns will soon become due. (Usually the due date is April 15, but it’s been extended by the IRS because the 15th falls on a weekend in 2018.)
Occasionally I get questions about divorce and the filing of income tax returns. Here is one of them.
Q: My husband and I are going through a divorce. Should we file joint income tax returns?
A: It depends. As long as you are married on December 31 for the calendar year for which the return is filed, you have the option of filing jointly or individually. Once you are divorced, you can no longer file jointly. If you file individually, your tax percentage will be slightly higher.
Whether you file jointly depends on several things. First, you should have an agreement about how the tax refund checks, or the tax liability, should be divided. You do not necessarily need to have your attorney prepare a written agreement (though this would be preferable), but you should have an agreement, in writing.
Second, you should be certain that there is no undisclosed income that is not being reported on the tax returns. This is important for two reasons. If your spouse has undisclosed income and you sign the tax return, you become liable to the IRS or the MN Department of Revenue for payment of the income tax and penalties on the undisclosed income. If you do not know about the undisclosed income you might not be criminally liable, but even so you could be held liable for payment of the tax due. Secondly, if your position is that your spouse earns more income than he discloses, if you sign a joint tax return which reports the lower income, your position become greatly weakened. It is never worthwhile to under report income simply to get a few more dollars of tax refund.
You have the option of filing jointly or separately. If you decided to file separately, you should discuss allocation of the income tax dependency exemptions. Often, a couple will divide the exemptions equally. (Note: as of 2018, the income tax dependency exemptions for children will disappear. You can still claim a child tax credit if you file as head of household, and if you meet income requirements, but the income tax dependency exemption for children has been taken away by the tax bill passed by Congress and signed by the President in December, 2017.) So, for the tax year 2017 the income tax dependency exemptions for children are an issue.
If you have any questions about this or any other divorce issue, feel free to call Minnesota divorce attorney Daniel M. Fiskum at (952) 270-7700 to set up a free, in-person consultation. (Sorry – but I cannot give legal advice over the phone to people whom I do not know and who are not my clients. But, I will meet with you for free.) Attorney Daniel M. Fiskum and Minnetonka Family Law, P.A., are conveniently located in the Carlson Towers at the intersection of Highway 494 and Highway 394 in Minnetonka, Minnesota. Divorce attorney Daniel M. Fiskum has practiced family law in Minnesota since 1992. He is a graduate of the University of Minnesota School of Law and has been named a Super Lawyer by the Minnesota Journal of Law and Politics. He is a member of the American Bar Association and the Minnesota State Bar Association, family law sections.