The above article is an excellent example of the types of issues that can arise when it comes to finalizing your divorce and the filing of tax returns.
Here at Feldmann Nagel Cantafio Margulis, PLLC we are very careful to specifically identify and define the tax return filing processes with regard to past tax years returns, the current tax year return and future tax years returns.
Each couple is different and we handle them on a case by case basis. With regard to past years, if the parties have not filed tax returns, we make sure that the filing of said tax returns becomes top priority. We then specifically set forth how any refunds or liabilities are going to be allocated as part of the divorce settlement. If all past years tax returns are already filed, we still generally set forth that any unknown refunds or liabilities will be allocated to the party whose income is the basis for any potential refund or liability thereto.
With regard to the current year, it is going to first depend if you are still married or officially divorced at the end of the calendar year. If you are still married at the end of the calendar year (similar to the article above), we encourage you to work with your Certified Public Accountant (“CPA”) and determine which form of filing is best for all parties involved – usually based on historical filings. If the divorce is final by the end of the calendar year, we encourage you to work with your CPA, and perhaps your Divorce Financial Planner, to determine what is best for you and your new financial circumstances.
With regard to future tax years, we specifically set forth that for each year thereafter, the parties shall file separate federal and state income tax returns. Each party shall be solely liable for her or his income taxes, capital gains, and any other taxes on property assigned to her or him in the final Divorce Agreement for said tax year, and forward, and that each party shall indemnify and hold the other party harmless with respect to her or his individual income taxes.
It is critical that you also consult with a Certified Public Accountant at all times relative to these issues.
Please contact the Domestic Team at Feldmann Nagel Cantafio Margulis, PLLC for all of your Family Law needs.