Many couples going through a divorce my wonder how they should file their tax returns while they are in the process. Whether or not you agree to file married filing separately or jointly you have to file married if you were still married on December 31st of the year you are filing.
Can you both itemize your deductions? April 01, 2019 When spouses file separately, both must use the same method of claiming deductions. That is, either both parties must itemize, or both parties must take the standard deduction. If you choose to itemize, it’s important to know how to divide your deductions. If your filing status is married filing separately, you typically report on your income tax return only your own income, expenses, credits, and deductions. Therefore, if you paid for a doctor’s appointment out of your separate checking account, you would claim that deduction on your return. Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise.
Different rules apply in community property states. In a community property state such as AZ, you will also need to report half of your combined community income and deductions using a worksheet.
Often, married couples have a lower overall tax liability if they choose to file jointly. This is not always the case, however. If you are unsure which filing method results in the lowest tax liability, you should determine your tax liability both ways before filing your return. For more information, give us a call at Dekker Tax & Accounting: 480-897-1067 or Dekker Divorce Financial Consulting at 480-897-1067.