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Divorce and Taxes – If a Decree of Divorce is Entered on December 31st, May the Parties File as Married?

Filing taxes can be confusing under normal circumstances. But it can be even more confusing when a person is either going through a divorce or recently become divorced. A common question under these two circumstances is when a person must file as married and when that person must file as not married.

The way the tax code is currently written, a person is either considered married “for the whole year” or not married “for the whole year.” There is no option to select married for a “portion” of a tax year. In other words, you are either married for a given tax year or you are not. So, where is the cut off?

In a nutshell, according to IRS publication 501, you are married for the entire year if you are still married (no final Decree of Divorce has been entered) on December 31st of a given year. If you have a final Decree of Divorce entered on or at any time before December 31st of a given year then you are considered not married for that entire year.

Some examples:  

a)     Bob filed for a divorce from his wife, Sarah, on July 14, 2012. Their divorce was finalized on May 5, 2013. Bob and Sarah must file as married for their 2012 taxes but as not married for their 2013 taxes.

b)     Mary filed for a divorce from her husband, George, on July 14, 2013. Their divorce was finalized on December 30, 2013. Mary and George must file as not married for their 2013 taxes (even though they were married for 364 of the 365 days in 2013).

So, whatever year the divorce is finalized in (the year the Decree of Divorce is entered) is the year that the parties may no longer file as married and must file as not married.

The following is taken from IRS publication 501:

Unmarried persons.    You are considered unmarried for the whole year if, on the last day of your tax year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree.

Considered married.    You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests.

  1. You are married and living together.
  2. You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began.
  3. You are married and living apart but not legally separated under a decree of divorce or separate maintenance.
  4. You are separated under an interlocutory (not final) decree of divorce.

 

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