You may only file a joint return if you are married at the end of the tax year (December 31) and both
of you agree to file and sign a joint return. 1 The box you check on your return is "Married filing
jointly." Same sex couples and domestic partners cannot file joint returns. You qualify as married even
if you are separated as long as there is no final decree terminating your marital status. A temporary
pendente order does not affect your marital status. However, if the divorce is final and your marital
status is terminated by the end of the tax year your filing status is either "single" or "Head of
There are pros and cons to filing a joint tax return which you should discuss with your tax advisor and
your attorney. Generally, your tax burden will be lower although this will not always be the case
depending on your respective incomes, deductions and credits. The main disadvantage of filing jointly
is that both of you are jointly and severally liable for taxes on the return, including any tax
deficiencies, interest and penalties. This exposure can be partially mitigated by executing a Tax
Indemnification agreement discussed below. Also the IRS may allow relief to a spouse who files jointly.
The three types of IRS relief ("innocent spouse," "separation of liability" and "equitable relief") are
discussed in IRS publication 971.
My spouse said they would sign a joint return but they are now refusing to do so?
Spouses often use tax returns as a bargaining tool. Generally, a joint return can only be filed where
both parties agree and both sign the return. 2. A court will not order unwilling spouses to file a joint
return. 3. However, in rare circumstances the IRS will accept a joint return signed by only one spouse
where there is evidence of a clear intent to file a joint return and the non-signing spouse does not file
a separate return. 4.
Effect of filing status upon child and spousal support
In calculating guideline child and spousal support, the Court has to take into account "the annual net
disposable income of each parent" which is computed by deducting from annual gross income, state
and federal income tax liability after considering the appropriate filing status, all available exclusions,
deductions, and credits. 5. Therefore, your filing status as "Married filing jointly," "Separate" or
"Married filing separately" will have an impact on the amount of support you pay or receive. In one
case, the California Court of Appeal overturned the trial court's decision where guideline support had
been incorrectly based on husband's status as "Married filing jointly" instead of "Married filing
separately." 6. If the parties calculate guideline child and spousal support using a certified program
such as "Dissomaster" and incorrectly input that the parties will be filing jointly when the Husband
payor should have been filing as "Married filing separately" and the Wife as "Head of household," the
Husband may well end up paying less in child and spousal support because the program makes
allowances for tax liability.
If we file a joint return what precautions should we take?
First, make sure that any tax refunds are paid to both of you. If you decide to have any refund sent to
you by check make sure that the check is paid to both of you jointly. If a direct deposit is sought make
sure the refund is routed to a joint account. You should reach a clear agreement as to how tax liability
will be apportioned. A common approach is to prorate tax liability using a ratio based on both spouses
separate incomes. Another approach could be based upon what each spouse would have paid if they
had filed separate returns. Then to the extent a spouse's share exceeds what he or she has already
paid by way of salary or withholding or estimated tax, that spouse would pay the difference.
Second, if you are going to file taxes jointly, it's a good idea to get your spouse to sign a Stipulation
regarding Tax Indemnification since both spouses will be jointly and severally liable taxes on the
return, including any tax deficiencies, interest and penalties. Even if the divorce (dissolution decree)
states that one spouse will be liable for any amounts due on previously filed joint returns, the IRS may
still hold both spouses jointly and severally liable and go after either spouse.
Example of a Tax Indemnification Agreement
IT IS HEREBY STIPULATED by Wife and Husband as follows:
1. Wife shall immediately provide the Husband with copies of all records and documents necessary for
the preparation by Husband and his accountant of Joint Federal and State Tax Returns (“the Tax
Returns”) for the year ending _____. Parties acknowledge that the Tax Returns will be prepared
solely under Husband's direction and control.
2. Wife shall immediately respond to any reasonable requests for information from the Husband or his
accountant in the preparation of the Tax Returns.
3. Wife shall sign the Tax Returns immediately upon presentation to her. Such signing does not
constitute an admission by Wife as to the accuracy of the Tax Returns.
4. In the event that the parties shall receive a Federal or State tax refund, the _____ shall
immediately endorse the full amount of the tax refund check to the ______.
5. The Husband agrees to release, indemnify and hold harmless the Wife from any Federal or State
claims, fines, liabilities, penalties and assessments arising out of the filing of the _____ Tax Returns,
with the exception of any unreported income to the Wife that she failed to provide to Husband and his
accountant in preparing the Tax Returns.
6. The Husband shall pay all costs and fees of any administrative or judicial proceedings in
connection with the filing of the Tax Returns.
Be warned. Even if you have a Tax Indemnification Agreement it may not help you if your spouse files
for bankruptcy. If you have doubts about the accuracy of your spouse's, file separately.
If you are still married at the end of the tax year (December 31) but separated and
your spouse will not file a joint return how should you file?
You must file either "Married filing separately" or as "Head of household" depending on your
circumstances. Filing as "Head of household" has the following advantages:
• You can claim the standard deduction even if your spouse files a separate return and itemizes
• Your standard deduction is higher.
• Your tax rate may be lower.
• You may be able to claim additional credits such as the dependent care credit and earned
income credit that you cannot claim if your status is "Married filing separately."
• There are higher limits for child care credit, retirement savings contributions credit, itemized
If you are still married by the end of the tax year you can file as "Head of household" if you satisfy the
• You paid more than half the cost of maintaining your home for the tax year. Maintaining a home
includes rent, mortgage, taxes, insurance on the home, utilities and food eaten in the home.
• Your spouse did not live with you for the last 6 months of the tax year.
• Your home was the main home of your child, step child or eligible foster child for more than half
• You could claim a dependent exemption for the child.
The other non-custodial spouse must then file as "Married filing separately." Once you are divorced
you may still file as "Head of household" if you paid more than half the cost of maintaining your home
for the tax year and your children lived with you for more than half the tax year. There are different
rules for filing as "Joint Custody of Head Household" and receiving a credit against California State
If one spouse files "Married filing separately" do we take the standard deduction or
can we itemize deductions?
Consider this example. Bob who separated from Jackie but is still married at the end of 2005 decides
to file "Married filing separately" in his 2005 taxes. He decides to itemize deductions which are
considerable. Jackie his wife does not have large deductions and wants to take the standard
deduction. The rule is that if Jackie qualifies as "Head of household" she can elect to take the
standard deduction or itemize. 8 If she does not qualify as "Head of household" and Bob itemizes she
must also itemize even if she has limited deduction. 9. This is true even if she files before Bob and
claims a standard deduction. She will have to file an amended return when Bob claims itemized
When the parties file separately who gets the mortgage interest deduction and
property tax deductions?
If the marital home is the separate property of one spouse they can claim the deductions. If the
property is jointly owned, the spouse that actually pays the mortgage interest and property taxes is
entitled to take the deductions. 10. Other expenses are deductible to the spouse to the extent that
they are paid out of separate funds. If they are paid out of community funds each spouse can deduct
one half of the interest and taxes.
Who can claim the dependency exemption and the Child Tax Credit and the Child
Generally, where the parties file separately it is the parent with whom the children have resided for
the longest period of time during the tax year that can claim the dependency exemption and the Child
Tax Credit ($1,000 for each child under 17). 11. If the child lived with both parents for the same
amount of time, the parent with the highest annual adjusted gross income gets to claim the child. It
can therefore be important to keep a log of the actual amount of time the children spent with you.
However, the non-custodial parent may take the exemption and the credit if the custodial parent signs
an IRS Form 8332 "Release of Claim to Exemption of Divorced or Separated Parents" or a divorce
decree or separation agreement releases the exemption and satisfies the wording of Form 8332. In
California the court has the power to allocate the dependency deduction to the non-custodial parent.
12. It may do this to maximize support. The Child Tax credit can only be claimed by the parent who
claims the dependency exemption. 13. Generally, whichever spouse is in the higher bracket should
claim the exemption and compensate the other spouse for the shortfall.
The Child Care credit can only be claimed by the custodial parent if the other parent is not a member
of the household for the last 6 months of the tax year. 14. Unlike the dependency exemption it cannot
be traded although you may claim the credit even if the dependency exemption has been allocated to
the other parent.
Contact a Los Angeles Divorce Attorney at Law Offices of Warren R. Shiell today!
Please call to make an appointment at 310.247.9913.
1. Generally see IRS Pub 504 "Divorced or Separated Individuals" at www.irs.gov
2. IRS Pub. 17, p.21. Available at www.irs.gov. 26 C.F.R. § 1.6013-1(a)(1)
3. Marriage of Carlton & D'Allessandro (2001) 91 Cal. App. 4th 1213.
4. In Riportella v. Commissioner, TCM 1981-463, Tax court held that Mrs. Riportella's failure to sign a joint return was not fatal because she had signed
joint returns for the previous two years, had signed a joint Form 4868 for an automatic extension, and had attempted to "sell" her signature for concessions in
5. Fam. Code, § 4059
6. Marriage of Carlton && D'Allessandro, supra.
7. See www.ftb.ca.gov
8. I.R.C. 2(b)(c)
9. I.R.C. 63 (c)(6)(a)
10. Rev. Rul. 71-268.
11. I.R.C. 152 (c)(4)(B)(i). IRS Pub. 501, p.12-13.
12. Monterey County v. Cornejo (1991) 53 Cal. App. 3d 1271.
13. IRC 24 (c)(1)(A).
14. IRC § 21(e)(4). IRS Pub. 503.
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