Do I have to file for divorce by June 30th if I want to file Federal Income Taxes as single next year?
/For tax reasons, the June 30th deadline is very important to many clients. Experienced family law attorneys will tell you that under the IRS rules, your marital status on the last day of the year or December 31, 2015 determines your marital status for the entire year. In California, the Court will not issue an official decree of divorce before 6 months from the date of filing and serving of the Petition for dissolution.
Your marital filing status is used in determining what type of return you must file, your standard deduction, and the correct tax. This is important because a change in marital status on your tax documents may impact your standard deduction and other tax benefits.
Also, a change in marital status may impact your tax bracket and the amount of income tax you should have withheld from your pay.
California Family Code 2339 provides that no judgment of dissolution is final for the purpose of terminating the marriage relationship of the parties until six months have expired from the date of service of a copy of summons and petition or the date of appearance of the respondent, whichever occurs first. This means that the earliest a Court can issue a final decree of divorce is six months from filing.
Who claims the child dependent exemption?
If you have children, one important tax issue to determine with your family law attorney is who will take the deductions for a dependent child. This is because the tax implications are important. For each dependent a parent can deduct $3,900 from their federal taxable income. In order to qualify, the child must live with the parent claiming the exemption more than half of the year and be under the age of 19 at the end of the year. Often parents will alternate who gets to claim the exemption from year to year.
If you are able to get a final divorce decree by December 31, 2015 and file as single another benefit may be that one spouse can claim claim Head of Household. This can create bigger tax savings. In order for this status, you and your ex must have lived apart for the last six months and the claiming parent also has to pay more than half of household costs. In this case, the other spouse files his/her return as single.
What about the Mortgage?
Another tax benefit to be aware of is the payment of mortgages. The person who stays in the marital home may be able to take advantage of one of the most popular tax credits which is the mortgage interest deduction. The mortgage interest deduction is the part of your monthly payment that covers the interest you pay on the mortgage.
The last issue to be aware of is property taxes. If both parties have made any estimated property tax payments this year, then you have two options. (1): one party can claim all of the payments or, (2) the payments can be divided between the parties pursuant to an agreement. These payments should be reflected on your tax return.
Tax issues can be complicated, especially when you are changing your filing status from married to single. Consult with a family law attorney and tax professional to make sure you are aware of the risks and benefits associated with changing your tax status.You can contact me at Amanda@gordonfamilylaw.com for more information.