Taxes and Divorce
During or after a divorce, couples may wonder whether to file their taxes jointly or separately. Married couples usually file their taxes together, often saving money through reporting a combined income. However, once divorced, ex-spouses must determine how to divide their finances and if they should report a combined income or separate incomes.
Filing Taxes after Divorce
After a divorce, ex-spouses have the choice to file their taxes jointly, as they most likely had been doing during their marriage, or to file separate tax returns. There exist advantages and disadvantages to each choice, and ultimately the best decision will depend on each person’s individual needs.
- Joint return. In a joint tax return, taxes are based on the averaged income of the two parties. Tax brackets are assigned using this averaged number rather than each person’s separate income. In many cases, filing taxes jointly is a money-saving venture, especially if one spouse makes more money than the other. People who file jointly are also eligible for certain exemptions, deductions, and credits that are not available to those who file individually
- Individual return. After a divorce, ex-spouses may wish to file their taxes separately. Although sometimes a money-saving venture for at least one party involved, in other cases filing separately can push one or both spouses into higher tax brackets, significantly increasing the amount they must pay.
There are several factors to keep in mind while making this choice. A qualified Raleigh divorce attorney can help you consider the full legal implications of any decisions you make during the divorce process.
Divorce inevitably causes a major change in the financial status of each party. Whether you choose to file jointly or separately, the experienced Raleigh divorce lawyers can help you make smart, financially-sound decisions. Contact the Law Offices of Marshall & Taylor PLLC at (919) 833-1040 to learn more.