Divorce and Tax Status

Many married couples choose to combine their finances. Often this takes the form of a joint bank account, where the incomes of both spouses contribute to a common pool. The advantages of this can include increased purchasing power, since it can be easier for two people to split the burden of buying a car than it is for one person to buy the car alone. This also usually means filing a joint tax return, rather than filing two separate forms.

Filing together can have tax advantages for some couples. When two people file joint taxes, their incomes are summed and divided by two. That total then determines what tax bracket the couple falls in, and consequently how much to tax them. If one spouse makes substantially more than the other, filing joint taxes can mean paying less in total taxes. The average of their two incomes may put them collectively in a lower tax bracket than the spouse with a higher income, resulting in less total tax paid.

When two spouses choose to part ways, however, it becomes necessary to separate their finances. If they have a joint bank account, this can mean deciding how to distribute the money between them. Likewise, when April rolls around and it becomes necessary to file a tax return, the two people now filing independently will be entering figures that are different from their joint tax return. In some cases this can mean moving into a different tax bracket, which can have big financial consequences.

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If you and your spouse are considering a divorce, but you have filed your taxes together in years past, you should ensure that you have a plan for the sudden change in your financial status that a divorce can cause. By working with an experienced divorce lawyer, you can create a plan that reduces the negative effects of the divorce on both of you. The Oceanside divorce lawyers of Fischer & Van Thiel, LLP are here to help you. To discuss your case with a lawyer, contact us at 760-722-7646 today