Obviously the people responsible for writing the tax codes have never been in the midst of a divorce at tax time. If they had been you could bet the rules would be different. If you are like me and still stuck in limbo because your one-day-soon-ex is dragging his feet on the final divorce hearing, then the IRS does not like you very much.
First let's talk about filing status. If you are still married on 12/31, you must pick one of the "married" filing status choices. Here's how the IRS defines "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 as husband and wife.
2. You are living together in a common law marriage that is 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. For purposes of filing a joint return, you are not considered divorced.
The one exception is if you have lived apart from your spouse for months and have a dependent in the home that you provide for - then you can file as Head of Household.
Here's the IRS qualifications for filing Head of Household...
You are considered unmarried on the last day of the tax year if you meet all the following tests.
1. You file a separate return
2. You paid more than half the cost of keeping up your home for the tax year.
3. Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances.
4. Your home was the main home of your child, stepchild, or foster child for more than half the year.
5. You must be able to claim an exemption for the child.
If you are like me and have no children in the home, you are stuck with the married choices.
I don't even want to share TheColdOne's last name or admit to even being his wife, much less file taxes jointly with him. I don't want to know his "business" (unless it pertains to the divorce settlement) and the last thing I want is for him to know MY business. That whole sharing thing ended the day I drove away from the House of Horrors for the last time. So the only choice is filing "Married - filing separately".
Problem with Married-filing separately (MFS) is you end up getting penalized for the lack of a signed divorce decree. If your spouse has the house, you end up even more screwed because you lose all those deductions. If you had to take a 2nd or even a 3rd job to make ends meet, you are toast as that throws you into an even higher tax bracket.
There are several deductions that you cannot claim since you are stuck with filing MFS. You are not allowed to deduct any interest paid on student loans when filing MFS. Now this really pisses me off since I am the one that paying for my kids' college education and I don't even get the benefit of deducting the interest. You cannot take the credit for child and dependent care. You cannot take the earned income credit.
Oh and that wonderful First Time Homebuyers Credit? You're screwed there also. You only get to claim $4000 rather than the full $8000.
The following credits/deductions are at half the allowance if you were filing jointly...
a. The child tax credit
b. The retirement savings contributions credit
c. Itemized deductions
d. The deduction for personal exemptions.
If your soon-to-be ex doesn't itemize his taxes, you are crap out of luck - you both must itemize or both take standard deduction.
And you just gotta love the first line from the IRS publication about MFS...
Your tax rate generally will be higher than it would be on a joint return.
Yes it sucks and yes it is not fair that you are having to take a hit on the taxes because someone is such a control freak that they won't schedule a final hearing. But welcome to the world of "Life Isn't Fair". There isn't a darned thing you can do except make some plans for the future.
If your OMG-please-be-my-ex is like mine and you are looking at a long drawn out divorce process, there are some things you can do to prepare for next year. Get a Separate Maintenance Agreement ASAP (also known as legal separation). This will free you up financially - not just with taxes but if you need to close out a 401K for the extra money. It may cost you a little more in attorney's fees but at this point, who gives a rat's ass? You will end up saving money in the long run should this mess drag on.
Whatever you do - DO NOT GIVE IN OR GIVE UP! There is a reason the soon-to-be ex is dragging the whole divorce thing out. It is to make you cave in and say "to hell with it". It is just another attempt to control and bully you. In his mind, if the whole thing gets repeatedly delayed, you will eventually reach a point where you cry "Uncle" financially and mentally. It's how he treated you during the marriage and that's how you always responded. Even if you end up with nothing more than the cost of your attorney, you can hold your head high and say "I stood up to the bully" because that is all he is.
So get the legal separation and file your taxes. Take the hit now but know that you are prepared for the future. If you have to file an extension with the IRS, do it and don't fret about it. You have to file your taxes - even if you don't want to. And stand firm - it's not going to be easy but it will damned sure be worth it!
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