Divorce proceedings bring many aspects of both spouses’ lives to a standstill. Regardless, tax obligations still exist for residents of North Carolina going through a divorce. Due to the overwhelming responsibilities associated with the split, some couples could make mistakes on their tax filings. Learning about these common errors may raise awareness among divorcing spouses with tax concerns.
The United States tax code includes many rules and statutes designed to assist troubled filers. However, not everyone knows that regulations intended to help them even exist, including married and divorcing taxpayers. For example, some might not realize that the IRS offers an opportunity for an “injured spouse claim.” The claim allows one spouse to seek a partial tax refund when the other spouse maintains tax or other obligations and the two file jointly. Those going through a divorce may wish to work with a tax attorney or another professional to figure out what existing benefits are worth exploring.
Also worth examining are ways to reduce tax debt legally. Not everyone takes every business deduction owed to them. A failure to do so could increase tax obligations. Such money could go toward other expenses that strain a budget or cause other problems.
Until the divorce becomes finalized, the two parties are still considered married. However, they do not need to file a joint tax return. “Married filing separately” is a filing status option available to married couples. Through the married filing separately status, spouses essentially file separate returns as if they were single. Doing so might avoid problems that could arise from filing a joint return during divorce proceedings.
Parents might take certain tax deductions. When divorce proceedings involve a child, one spouse becomes the custodial parent. Legally, that parent may take the appropriate exemption amount on his or her tax return. An attorney may help couples determine whether the proper parent is claiming the exemption. A family law attorney may be able to answer other questions a client puts forth and might offer advice on tax matters and other issues.