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Effect of Legal Separation and Divorce on Your Ability to Claim “Single” Tax Status

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According to the IRS, in order to be able to claim “single” tax status, you must be “unmarried or legally separated from your spouse under a divorce or separate maintenance decree” on the last day of your tax year, and you do “not qualify for another filing status.” (See IRS Publication 501).

Determining your marital status can be a complex legal matter with numerous exceptions, and exceptions to exceptions. Only a tax professional who reviews the facts of your case may be in position to advise you on your marital status. Here, I will only attempt to sketch the broadest concepts to give you some awareness of the issues.

IRS may consider your marital status as “unmarried” if, on the last day of the relevant tax year, “you were unmarried or legally separated from your spouse under a divorce or separate maintenance decree.” Id. Usually, the state law will determine whether you were legally separated from your spouse on the last day of the relevant tax year. If you were divorced under a final decree by the last day of the year, the IRS will consider you unmarried for the entire year. However, if the divorce was motivated by the desire to file your tax return as unmarried persons, and you and your spouse remarry the next year, the IRS will disregard the divorce for tax purposes and demand that you and your spouse file your tax return(s) as married persons.

If your marriage is annulled (by a court decree which holds that no valid marriage ever existed), the IRS will consider you as “unmarried,” and you must amend your tax returns for all years (within the Statute of Limitations – usually the past three tax years) affected by the annulment.

Keep in mind that, if you are able to claim “single” status, you may also be eligible for a more advantageous tax filing status, such as “head of household” or “qualifying widow(er) with a dependent child.”

Call Sherayzen Law Office to discuss your tax filing status with an attorney!

Importance of Determining Your Tax Filing Status

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Figuring out your filing status is the first major step in filing your tax return. Your tax filing status not only will allow you to determine the correct tax (from the Tax Computation Worksheet or appropriate column in the Tax Table), but also it is crucial to understanding your eligibility for and the exact amount of deductions, exemptions, tax credits. For example, in some situations, if your taxable income is close to $160,000, the choice between filing as “single” and filing as “married filing separately” may influence whether you need to pay the alternative minimum tax (“AMT”); it is more likely that filing as “single” will help you avoid AMT, while “married filing separately” status may have the opposite effect. Sometimes, the latter tax filing status may also make you ineligible for certain tax credits even at a much lower income bracket – a situation that may be avoided if you are filing joint tax return with your spouse.

There are five possible tax statuses: 1) single; 2) married filing jointly; 3) married filing separately; 4) head of household, and 5) qualifying widow(er) with dependent child. The benefits and drawbacks of each status differ greatly depending on a tax situation. In some cases, you may be eligible for more than one status (for example, single and head of household); in other cases, your eligibility may be greatly influenced by the choices you make.

In order to draw out the benefits and avoid costly mistakes, careful tax planning is necessary. The Internal Revenue Code (“IRC”) is so complex that it requires a tax professional to fully understand its provisions. Tax attorneys are professionals who usually are in a much better position to legitimately utilize possibilities offered by the IRC.

Sherayzen Law Office is a law firm that offers individual and business tax services. We can help you understand your current tax position, file the tax returns for you, and carefully plan your tax strategies for the future. CALL NOW to start resolving your tax issues!