Orange County, CA (Law Firm Newswire) February 26, 2015 - As tax season approaches, Forbes and other financial publications have begun publishing tax tips for the nearly-divorced and newly-divorced.
Family law attorney Gerald Maggio says that while these annual articles often do an excellent job helping those with a finalized divorce understand their options, those still in the middle of a divorce are often left needing more guidance.
“These articles often fail to fully explain the ramifications of the filing choices that are open to still-married individuals,” said Maggio. “Those in the midst of a divorce should take the time to understand their decisions up front, because surprises that arise later can increase the cost and the conflict level in the divorce.”
Maggio points to one particular example: the traditional advice that those in the midst of a divorce file jointly, if at all possible, in order to increase tax savings. Maggio agrees that this decision can help divorcing spouses save money, but he adds that couples agreeing to use this filing status need to understand that they can then become jointly liable for for any penalties or interest that may arise from the filing.
If divorcing spouses can decide in advance how any additional tax liability would be handled, a simple document formalizing that agreement (before filing taxes) can save costs and headaches.
For those filing separately, tax experts note that head-of-household status can offer significant tax savings to those who qualify. According to Maggio, any divorcing couple filing separately must communicate openly about the status, deductions and expenses that each spouse is claiming. “If both spouses claim head-of-household status, or if both spouses deduct the same expenses, the process becomes longer and more expensive for everyone,” explained Maggio.
Maggio’s top advice to couples filing taxes in the midst of a divorce is to start early. “Rushing as the tax deadline approaches is the worst mistake a divorcing couple can make,” remarked Maggio. “The pressure increases conflict and boosts the likelihood that savings will be missed.”
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