Making Tax Filing Changes Following a Divorce

 Posted on May 07,2022 in Illinois Divorce

Many lifestyle changes occur following a divorce, from living arrangements to property division. If you recently completed a divorce, you may have questions regarding how this significant change affects different areas of your life, including how to file for taxes as a single individual. Tax considerations are often addressed directly in the divorce decree before entirely dissolving the marriage. However, individuals may still have questions regarding how to make tax filing changes or how a divorce will affect their tax refund at the end of the year. 

Filing Taxes Separately 

Whether or not a couple in the process of getting divorced can file their taxes jointly depends entirely on when the divorce is finalized. Suppose the spouses are still legally married before the last day of the year, December 31. In that case, the Internal Revenue Service (IRS) still recognizes the individuals as a legally married couple, and they have the option to file taxes jointly. Once the divorce is finalized, the IRS will require that taxes be filed separately for that tax year. 

You can amend your tax filing status by filling out a 1040-X form. Often, divorced couples will have changes in their total income or child custody arrangements. For example, individuals who now have sole custody of their dependent children must update this on their tax status. Similarly, if you no longer have full custody of your children, you must also document this in your tax file. It is crucial to make these modifications if there has been a change in:

• Total yearly income for either spouse 
• Dependent custody (children or other dependent individuals)
• Filing status (joint or single)
• Deductions and credits

If you need to change your tax filing status following a divorce, an attorney can help you obtain the property 1040-X forms. 

End-Of-Year Tax Refunds

Whether or not individuals will receive a tax refund can depend on a few factors. Typically, people can receive a sum of money as a tax refund at the end of the year, usually due to overpaid taxes. However, a divorce may change how much tax is owed and, inversely, how much of tax refund the filer will receive. 

Marital property is expected to be divided fairly between both spouses. This includes financial property as well. Once spouses complete a divorce and file their taxes separately, they often assume their tax refund is their sole property. However, this money can be considered marital property between ex-partners in Illinois. Even if the divorce is finalized and a person files their taxes as a single entity, their tax return may be shared with their ex-partner because the money accumulated throughout the year was during the marriage. If a couple was married through December, all of the funds accrued through that tax season were as a married couple, and the state would likely divide nearly the entire refund between partners. If a couple divorced over the summer, about half of the refund would be considered joint property and divided as so. 

Speak to a Kane County Divorce Attorney 

At Weiler & Associates, Inc., we understand that the financial implications of a divorce can be the most contentious and challenging aspect of marriage dissolution. Our St. Charles divorce lawyers have experience working to solve complex elements of a divorce, including financial considerations such as tax filings and refunds. To contact our office today, please reach out to us by calling 630-331-9110. 

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000 

https://www.irs.gov/newsroom/if-you-must-amend-your-return