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- How Does Divorce Affect Your Filing Status
- Filing a Joint Income Tax Return
- The Difference Between Legal Separation and Divorce During Filing
- When Should You Not File Jointly
- Claims for Dependents
- What Happens if a Spouse Fails to Pay Tax Liabilities
- Frequently Asked Questions: Filing Taxes During a Divorce in Arizona
- Contact the Family Law Attorneys at Colburn Hintze Maletta
Divorce can be a challenging process, affecting various aspects of your life, including how you file your taxes. Understanding how your filing status changes and what it means for your taxes can help you make informed decisions during this transition period. Arizona law, under the guidelines of the Arizona Revised Statutes, dictates certain legal obligations and rights concerning divorce, which indirectly affect tax filing status and procedures.
Colburn Hintze Maletta can assist you in understanding your rights and obligations regarding tax filing status, claims for dependents, and potential tax liabilities and benefits resulting from your divorce
Contact us today at 602-825-2500. to discuss your tax filing questions or concerns related to family law matters.
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Filing Taxes During a Divorce
How Does Divorce Affect Your Filing Status
The impact of divorce on your tax filing status is substantial and varies significantly before and after the divorce is finalized.
Before the Divorce is Finalized
Prior to the finalization of a divorce, couples are still legally married in the eyes of the law. This status allows them to choose between filing a joint tax return or filing separately as “Married Filing Separately.” Filing jointly can provide several tax benefits, including access to higher income thresholds for tax brackets and eligibility for various credits and deductions. However, it also means both parties are jointly responsible for any tax liabilities and compliance with the tax return.
Filing as “Married Filing Separately” may result in higher tax rates and limited access to certain tax credits, but it separates each spouse’s tax liabilities, which could be beneficial if one spouse suspects the other of tax misreporting or if they prefer not to be financially intertwined.
After the Divorce is Finalized
Once a divorce is finalized, each individual is considered unmarried for the entire tax year if the divorce is completed by December 31. The individuals must then file as “Single” or, if they qualify, “Head of Household.” Filing as “Head of Household” offers several benefits over the “Single” status, such as lower tax rates and a higher standard deduction. To qualify for “Head of Household” status, you must have paid more than half of the household expenses for the year and have a qualifying dependent live with you for more than half the year.
Filing a Joint Income Tax Return
During a divorce, deciding whether to file a joint income tax return requires careful consideration of various factors. This choice can significantly impact both parties financially and legally, especially under the specific context of Arizona law and federal tax regulations.
- Benefits of Joint Filing: Filing jointly can result in numerous benefits, such as eligibility for various tax credits and lower tax rates compared to filing separately. For many divorcing couples, this option can provide a financial advantage, reducing the total tax burden faced by each individual.
- Risks and Responsibilities: When filing jointly, both parties are jointly and severally liable for the information reported and the taxes due, including any potential penalties and interest. This shared responsibility means that if one party omits income or incorrectly reports deductions, both are liable for any resulting tax liabilities. This is a critical aspect to consider, especially if trust issues exist or if the divorce proceedings are contentious.
- Considerations and Consent: Both parties must agree to file a joint return. This agreement involves trust and transparency about financial matters, which can be challenging amidst the emotional and financial complexities of a divorce. If one spouse suspects the other of tax evasion or misreporting income, it’s advisable to file separately to avoid potential legal complications.
- Legal Separation and Joint Filing: In Arizona, if you are legally separated, you are not considered married for tax purposes and therefore cannot file a joint tax return. It’s important to understand the distinction between legal separation and an ongoing divorce process when making tax decisions.
- Protective Measures: If you opt to file jointly, consider signing an indemnity agreement with your spouse. This agreement can outline responsibilities for any taxes, penalties, and interest due on the joint return and can provide some financial protection if disputes arise later.
Before deciding to file jointly, it’s essential to weigh the pros and cons carefully. Consider seeking advice from a tax professional or a family law attorney to understand fully how this decision impacts your specific situation.
The Difference Between Legal Separation and Divorce During Filing
In Arizona, legal separation and divorce affect tax filing differently. Legally separated individuals are considered unmarried for tax purposes and must file as “Single” or “Head of Household,” if eligible. However, until a divorce is finalized, spouses are still considered married and can choose to file jointly or separately.
When Should You Not File Jointly
Deciding not to file a joint income tax return during a divorce in Arizona is a decision that should not be taken lightly, as it can significantly impact your financial and legal situations. There are specific circumstances where filing separately is more beneficial:
- Mistrust and Financial Discrepancies: If there’s a lack of trust between you and your estranged spouse, especially regarding financial honesty and transparency, it’s safer to file separately. This decision is crucial if you suspect your spouse of underreporting income, overstating deductions, or other forms of tax evasion.
- Separate Debts and Liabilities: If one spouse has significant outstanding debts or potential legal financial liabilities, filing separately may protect the other spouse from being responsible for these obligations.
- Disparate Financial Situations: When one spouse has significantly higher income or eligible deductions, filing separately might lead to overall lower household tax liabilities. This scenario often requires calculations to compare the tax responsibilities under both filing statuses.
- Pending Divorce Proceedings: If the divorce proceedings are contentious, or if there is a considerable disconnect in negotiation about financial matters, it may be more straightforward and less contentious to file separately.
- Benefit Maximization: Sometimes, individual tax situations, such as eligibility for certain credits or deductions, may result in a better financial outcome if filed separately. Situations that warrant this include when one spouse qualifies for significant medical expense deductions, educational tax credits, or other itemized deductions that would not be fully beneficial on a joint return.
Claims for Dependents
The right to claim children as dependents usually goes to the custodial parent, defined by the IRS as the parent with whom the child spent the most nights during the tax year. However, this right can be negotiated and assigned as part of the divorce agreement.
If the non-custodial parent is granted the right to claim the child or children as dependents, the custodial parent must complete IRS Form 8332 to release the exemption. This form should then be attached to the non-custodial parent’s tax return.
It’s important to note that while the right to claim a dependent can significantly affect tax outcomes, such as qualifying for the Child Tax Credit, it does not affect the obligation for child support or other financial responsibilities decided during the divorce proceedings.
Additionally, the rules surrounding who can claim the child and dependent care credit and earned income credit remain stringent. Typically, only the custodial parent can claim these credits, regardless of who claims the exemption for the child. Therefore, these factors should be considered when negotiating divorce terms.
Both parents cannot claim the same child as a dependent in the same tax year; doing so can lead to IRS audits and additional penalties.
It’s advised to clearly establish the terms regarding dependent claims in the divorce decree to avoid future conflicts and ensure both parties understand their tax obligations.
What Happens if a Spouse Fails to Pay Tax Liabilities
When a spouse fails to pay tax liabilities, it can create significant legal and financial challenges, especially if you have filed a joint tax return. In the case of a joint return, the IRS holds both spouses jointly and severally liable for any taxes owed. This means that each spouse is individually responsible for the entire tax debt, even if all the income reported was earned by only one spouse.
If tax liabilities are not paid, the IRS can take several actions to collect the owed amount, including garnishing wages, seizing bank accounts, or placing a lien on property. These actions can impact both spouses, regardless of who earned the income or incurred the tax debt.
However, there are protections and relief options available for individuals who find themselves in this situation due to the actions or inactions of their spouse:
- Innocent Spouse Relief: If you can prove that you were unaware of the understatement of tax, you may qualify for innocent spouse relief. This relief could release you from the obligation to pay taxes, interest, and penalties related to the joint tax return.
- Separation of Liability: This applies to those who are divorced, legally separated, or no longer living together. You may be relieved of the responsibility for tax, interest, and penalties related to the joint return that were not properly reported.
- Equitable Relief: If you do not qualify for innocent spouse relief or separation of liability, you may still qualify for equitable relief. This form of relief is applied in situations where it is unfair to hold you liable for the tax debt based on the facts and circumstances.
It is important to respond promptly if you receive a notice from the IRS regarding unpaid taxes. Ignoring the problem can result in increased penalties and interest, and potential legal action. Consulting with a tax professional or a family law attorney can provide you with guidance on how to proceed and may help mitigate the consequences of your spouse’s failure to pay tax liabilities.
Frequently Asked Questions: Filing Taxes During a Divorce in Arizona
Q: Can I file my taxes as “Head of Household” if I am going through a divorce in Arizona? A: You may file as “Head of Household” if your divorce has not been finalized and you meet certain criteria. These include paying more than half the cost of maintaining your home for the tax year and having a qualifying child live with you for more than half the year. Consult with a family law attorney in Arizona to determine if your situation qualifies.
Q: If my divorce is finalized towards the end of the tax year, how does this affect my tax filing status? A: If your divorce is finalized by December 31st, the IRS considers you unmarried for the entire tax year. You would need to file either as “Single” or “Head of Household,” if eligible. This change could affect your tax liabilities and available deductions.
Q: Are there any tax benefits if I choose to file jointly with my ex-spouse after our Arizona divorce has not been finalized? A: Filing a joint income tax return can offer several benefits, including access to certain tax credits and potentially lower overall tax liabilities compared to filing separately. However, both parties must agree to file jointly and be aware that they are both responsible for any tax due and any potential audits or liabilities.
Q: What happens if my spouse fails to report income correctly on our joint tax return in Arizona? A: If you file a joint tax return and your spouse incorrectly reports income, both of you are jointly responsible for any additional taxes, interest, or penalties. If you were unaware of the discrepancy, you might qualify for Innocent Spouse Relief from the IRS. Consult with an experienced divorce attorney or a tax professional to explore your options.
Q: How can filing as “Married Filing Separately” affect my taxes during a divorce in Arizona? A: Filing as “Married Filing Separately” may result in you paying higher taxes due to the loss of certain tax benefits and higher tax rates compared to filing jointly. However, it can be beneficial if you wish to be solely responsible for your tax return or if there are significant discrepancies in income or deductions between you and your spouse.
Q: How long after my divorce can my ex-spouse and I continue to file our taxes jointly in Arizona? A: You and your ex-spouse can only file your taxes jointly if your divorce has not been finalized by the end of the tax year. Once the divorce is finalized, you must file separately for that tax year and all subsequent years.
Q: What is the significance of the “end of the tax year” for filing statuses during a divorce in Arizona? A: The “end of the tax year” is significant because your marital status as of December 31st determines your filing status for the entire year. If you are still legally married on this date, you can choose to file jointly or separately. However, if your divorce is finalized by this date, you must file as “Single” or “Head of Household,” if applicable.
Contact the Family Law Attorneys at Colburn Hintze Maletta
If you are dealing with the complexities of filing taxes during a divorce in Arizona, Colburn Hintze Maletta can assist you. Understanding how to properly file your taxes during this transitional period can be complex, and the experienced attorneys at this firm can provide guidance tailored to your situation.
For those undergoing divorce proceedings, it is important to understand how this will impact your tax filings, whether you should file jointly or separately, and how to navigate claims for any dependents.
You can reach the law firm around the clock at 602-825-2500. to discuss your tax filing questions or concerns related to family law matters.
David Maletta is a widely respected criminal defense attorney with over 23 years of experience and has worked on over 1,000 cases and has successfully won over 100 jury trials. David graduated from Northern Arizona University, Magna Cum Laude in 1993 with a degree in Psychology. Shortly thereafter, he earned his Juris Doctor degree from Seton Hall University School of Law in 1998. He has extensive experience in criminal and DUI matters, homicide, sexually-based offenses, domestic violence, white-collar crimes, and various misdemeanor crimes.
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I had the opportunity to work with Darin during a very troublesome time in my life. As a family attorney, I found him to be very professional, very empathetic, and very responsive to all the issues I faced. I would recommend him to anyone without a second thought. Thank you, Darin!
Gary C. - Google Review
“He fights for his clients like no one I have ever seen”
David Maletta is the absolute best trial attorney in the state of Arizona. He is a kind, emphatic, and extremely patient person. As an attorney, he is prepared, aggressive, and extremely skilled. He is not afraid to go to trial and fight for his clients, like other attorneys that just plead their clients to the original charges. When he is in trial, he flips a switch and goes from a nice guy to a killing machine. He fights for his clients like no one I have ever seen. Watching him do a cross-examination is exhilarating because he is so good it’s scary.
Patricia Bevins - Google Review
“There is NOBODY I would rather have defending me than David”
I hired David Maletta and it was the best decision of my life. His knowledge, genuine interest, overall attitude, and ability to connect with people is incomparable. I could talk about all of this at length. I COULD do all of that, but that wouldn’t do David justice. He first and foremost demonstrates his interest and genuine care for his client. Being in uncharted territory with a criminal charge and nowhere to turn, David’s presence and personality put all nerves at ease. I went through a jury trial with David beside me. The trial ran for 3 days and I spent a significant amount of time with David one-on-one. During this stressful time, he wanted to hear my input and thoughts on everything. David was incredible from the first day I met him. Not only is he a great attorney, but he is also a great person who cares about people and finding justice for his clients. He connects to the human side of people. I can’t put into words how much David cares about the individual in a case. When it comes to the courtroom, there is NOBODY I would rather have defending me than David.
Jacob - AVVO Review
“I still have a clean record to this day.”
One piece of advice for people who are charged with anything in Arizona is to hire a great lawyer because the state does not care if you’re innocent or not. The Arizona legal system will try to ruin your life. A couple of years ago I was the victim of an antisemitic hate crime when a guy named Billy, who had a history of drug and alcohol issues and was thrown out of the Navy for being violent, decided to attack me after drinking all day in Old Town (Sunday funday) over a pointless argument over whether it’s better to buy homes immediately post-recession or during the 10th year of a bull market run which was his argument. The disagreement led to Billy making several anti-semitic comments and assaulting me, which led to me beating up billy. Billy and his friends then went to the police and lied to try to get me thrown in jail for months for assault while getting 10s of thousands of dollars in restitution in the process. I hired David Maletta. We went to court and destroyed Billy and his best friend/roommate Taylor who were trying to extort me and ruin my life. In Arizona there is a 3.5% chance you’ll get all charges dropped because of how hard the state is on crime but we pulled it off and I still have a clean record to this day.
MJ Walsh - Google Review
“I would give them more stars, but the option is not there”
Best divorce lawyers in Arizona, hands down. Timothy Hintz handled my divorce, and as a father, I have my son and our house. I would give them more stars, but the option is not there. His paralegal Jennifer Bone is extremely competent, and the whole team is very friendly. Took a big weight off, having them behind me.
Joseph A. - Google Review
“David was relentless in his pursuit of my son’s innocence”
We retained David Maletta to represent our son after being cited for what can only be described as a momentary lapse of reason. David was extremely knowledgeable, was able to clearly communicate very complicated concepts, and was relentless in his pursuit of my son’s innocence. He had strong relationships with the prosecuting attorney and respect of the judge, which ultimately resulted in my son learning a really hard lesson with limited consequences (traffic school and writing an essay to the judge on the physics of driving 130MPH and what happens if that goes badly). I have already sent all of my friends with teenage and 20 year old kids his contact information for when they inevitably get that call. David completely exceeded all of our expectations and we could not recommend him any stronger. Thank you for everything.
Shawn H. - Google Review
“Tim was absolutely amazing and worked diligently”
I had an incident and was given the catch-all charge. There wasn’t really anything I could do by myself to get out of it. Tim was absolutely amazing and worked diligently to ensure that I would have the best possible outcome from my case. Which he successfully achieved! As of right now, I am on the path to having my case fully dismissed. A couple of things that really helped me through this process was that Tim did an amazing job at answering my questions. He was available almost anytime and would respond promptly when he got my emails. He was also very approachable and comforting to be around while we had in person meetings and especially when I was at the court house. I would trust him and the company he works for with any other cases in the future, and as of right now, they will be my first choice if I need a lawyer in the future.
Dylan - AVVO Review
“The calm in the middle of my storm…”
I recently consulted with Darin after my wife filed for divorce. He was referred to me by a friend whom I very much trust. Darin was the antithesis of the first two attorneys I consulted (who were matter-of-fact and had very little empathy about the fact that I was struggling emotionally with what was transpiring). From the first few minutes of speaking with Darin, it was obvious that he was very knowledgeable and skilled with divorce and family matters. While that was most important to me, the thing that made the difference was his calming, logical, and empathetic approach. He took the time to listen and empathize with me. He took the time to understand what I wanted to achieve through this process and laid out my options. After the consultation, I knew he would be my attorney if I had to pull the trigger. I, ultimately, didn’t have to engage Darin’s services due to a reconciliation with my wife. I hope I never have to go through that process again. However, if I do, I know beyond a shadow of a doubt who I will be hiring to represent me…Darin R. Colburn. Darin, thank you for caring and being more than an attorney.
Frank - AVVO Review
“Because of Darin I got my daughter back”
Before I hired Darin I went through a total of 3 different attorneys in two different states fighting a jurisdiction battle, when my daughter was taken to a different state. It was a very difficult decision to switch attorneys at one of the most difficult, time sensitive and important times in my case, but I’m very glad I did. Upon receiving my file from previous attorneys Darin came very familiar with my case quickly. Like other people have explained he took the time to lay everything out and explain how the process was going to proceed and what to expect and continued to do this as new issues arrived. He is also very quick at responding to emails and phone calls. My case was getting close to trial as told by my previous attorneys, I did not want to go to trial as I know this is very costly (most attorneys will convince you that you need to.) Darin knew my situation, fought for what was right and got the results I wanted while avoiding a costly trial. He is extremely knowledgeable in the Child Support Guidelines as well. Because of Darin I got my daughter back. I would highly recommend him and would hire again for any future issues. Thanks Darin!
Chris - AVVO Review
“Responsive, sympathetic, professional, patient, and kind.”
On one of the worst and most surreal nights of my life (do not EVER get a DUI people!) I was lucky enough to find my way to Tim Hintze. Being in Phoenix for the Thanksgiving holiday from out of town, and after spending the evening with family, I ended up spending the night in jail.
Tim turned one of the worst experiences in my life into “it could have been so much worse!” Working with him from a different state, he covered the bases & paperwork, showed up for me in court, gave me numerous connections to muck my way through the system, and held my hand the whole way.
I cannot imagine how much worse this experience could have been, and thanks to Tim, I didn’t need to. He was responsive, sympathetic, professional, patient, and kind throughout the long process, drawn out by many months due to Covid.
Keep Tim’s number handy and in your contacts in the event you are ever in the sorry position to need a DUI lawyer!
Holly Weber - Google Review
“Nothing but good things to say about my experience.”
I have nothing but good things to say about my experience working with David Maletta. I was in a very high-stress situation facing a pending DUI charge. He doesn’t know this, but I actually interviewed 5 potential lawyers, and he was the most optimistic of all of them. He took over and handled everything, and now I don’t have to live with a DUI. Thank you so much for everything! Highly recommend them to anyone looking for legal help.
Lauren Koontz - Google Review
“Listens to every request that you make on a case”
I honestly just want to let it be known to any and everyone looking for an attorney on a case. Whether it be DUI, possession, or your every day to day traffic violations where you need representation attorney Tim Hintze is your man. You have to respect a man that listens to every request that you make on a case and he gets in there and gets it done. Tim has my respect as an attorney and being a well-rounded representer. From him being honest on the possibility and options for your case to him being easy to work and communicate with via over the phone or face to face Mr. Hintze is working it out.