Tax Question – (Q & A)

Jan 2017


Dear Rick:
I have a tax question that I hope you can help me with. Last year my daughter filed for divorce. Because of the bickering and fighting, the divorce was not finalized until this year. We were told that for her 2016 tax return she is considered married; is that correct? My daughter’s ex has requested that for 2016 they file a joint tax return. My daughter does not trust her ex, nor their CPA, her ex’s best friend. My question is does she have any other options? You should know that nothing was in the divorce papers with regard to taxes, her ex was the breadwinner in the family and my daughter only works part time and only earned about $10,000 last year.

Dear Bruce:
For 2016 tax purposes your daughter is considered married. According to tax laws, someone’s filing status is determined on December 31st. Therefore, the fact that your daughter was still married as of the end of the year would mean that her tax status for 2016 is married.

With regard to filing a joint return, she’s absolutely under no obligation to do so. Since the divorce settlement did not discuss tax filings, your daughter is not required to file a joint return. She can file as a married person filing separately, and that is what I recommend.

In the great majority of situations, married couples do file joint returns. The way our tax laws work, it is generally more favorable for a married couple to file a joint return. However, there are many situations, including the one at hand, where filing as a married person filing separately, is appropriate. It is important to remember that when filing a joint return, both parties sign the tax return and thus, they are each liable for the accuracy of the return. Therefore, if there was an irregularity in the return two years down the road, your daughter could have some responsibility.

Considering that the divorce was difficult and she does not trust the CPA, my recommendation is to file a return on her own. In this way she doesn’t have to deal with her ex-husband or the CPA. In addition, in looking at the numbers you have provided me, it appears that her tax liability, if any, will be minimal; therefore, filing a joint return probably won’t save her any money.

I’ve mentioned this many times before, when you sign a tax return, you are liable for what’s on that return. If you do not have confidence in your tax preparer, that is a sure sign you need a new tax preparer. In the case at hand, since your daughter does not trust her ex or the CPA, it is slam dunk that she should not file a joint return.

One last note – what may give your daughter a sense of satisfaction is the fact that if she chooses to file as married filing separately, the result will probably be that her ex-husband will end up paying more in taxes.

Good luck!