Estranged wife and taxes

[chipsah]

Figured I would come to my best source of advice to toss out this question/scenario.

After 6 years of marriage and two kids, my "soon-to-be" ex-wife decided she wanted to be free and feel independent. Long story short, she cheated on me and moved out of the family home. Both kids stay with me 100% of the time as she rents a room and can't have them spend the night with her. She has agreed to give me full physical custody and pay the appropriate child support. Trouble is, we moved to a new state recently and need to establish residency before we can file the divorce paperwork.

Now that tax time has come around, I told her that I was going to file as Head of Household and exclude her income seeing as the kids are always with me and she has not lived in the family home since April 2012. On the up side for me, the larger standard deduction combined with a single income results in a pretty substantial federal refund for me. However, she will likely end up owing on her taxes because she negligently miscalculated her withholding for 2012. Therefore, she has proposed that we continue to file as married-joint until the divorce is finalized and split the refund.

The way I see it, I have a couple of options and the respective refunds:
1. Be smart. File HoH and take the refund to support the kids. ($7,500)
2. Be nice. File HoH and give her some of the money to help her out. ($7,500 - what I give her)
3. Be stupid. File married-joint and split the refund with her as she suggests. ($5,200 / 2)

There are, of course, variations on each option such as letting her claim one child, but I do not want to set a precedent for the future. I also feel like it was on her to manage her withholding (especially considering she decided she wanted to be independent - which, by the way, is still her only rationalization for her actions).

So... I guess I don't really have a concrete question. But any input would be much appreciated. Thanks in advance.

 

[Darwin18]

If you're going through a divorce you should have a lawyer and they should help you with this. Don't commit tax fraud for your soon to be ex wife!

 

[Yooper]

If you are not legally separated or divorced, you are legally married. If you're legally married, you have to file as "married filing jointly" or "married filing separately". You don't get to be a single parent until you are legally not married.

Yes, if you lived apart for the last 6 months, you could technically do this. But if she used your address at all, say for mail or for her driver's license or car insurance together, etc, you could get into serious trouble.

 

[chipsah]

If you're going through a divorce you should have a lawyer and they should help you with this. Don't commit tax fraud for your soon to be ex wife!

We've actually agreed on everything so I don't have a lawyer (at least not yet). Where do you see the tax fraud? Would that be in filing a joint return? According to the literature I have read, I am able/legal to file head of household as long as we don't both claim the same dependent.

 

[Varmintman]

Man I feel for you. When I got divorced I went through much of the same thing and I finally got to the point I put my foot down and got a lawyer involved.

Bottom line though what worked for me very well may not work for you. Until the divorce is final though I think you are responsible for any debt or until you meet with a lawyer.

Good luck man. I as well have sole custody of my kid. Just remember that in the big picture of things it is the kids that really matter

 

[chipsah]

If you are not legally separated or divorced, you are legally married. If you're legally married, you have to file as "married filing jointly" or "married filing separately". You don't get to be a single parent until you are legally not married.

Yes, if you lived apart for the last 6 months, you could technically do this. But if she used your address at all, say for mail or for her driver's license or car insurance together, etc, you could get into serious trouble.

Thanks, Yooper. She hasn't used my address at all since April. I guess my best bet at this point would be to consult a tax attorney with all the details.

 

[chipsah]

Man I feel for you. When I got divorced I went through much of the same thing and I finally got to the point I put my foot down and got a lawyer involved.

Bottom line though what worked for me very well may not work for you. Until the divorce is final though I think you are responsible for any debt or until you meet with a lawyer.

Good luck man. I as well have sole custody of my kid. Just remember that in the big picture of things it is the kids that really matter

Thanks for the empathy. As far as the debt goes, it wouldn't be much. I estimated about $500 based on the income information she gave me. I really don't have a problem helping her out with that. I am not going for blood, just trying to do what is best for me and the kids. And yes, I realize very well that doing what is best for the kids is the most important thing. In my view, she realized it too and walked away.

 

[usfmikeb]

You're going to need a divorce attorney at some point, and this would be a good time to get one, instead of having to pay for a tax attorney as well.

 

[upperNY01brewer]

Nice guys finish last, stick it to her and keep all the money to yourself, you have earned the right. Been there done that !!!!!!!

 

[usfmikeb]

Nice guys finish last, stick it to her and keep all the money to yourself, you have earned the right. Been there done that !!!!!!!

Before acting on advice like this, be sure to consult an attorney first. Granted, sounds like your wife really made some bad choices, which won't help her in court, but it sounds like you've been able to make most of the difficult decisions amicably. Sticking it to her on taxes could reverse all of that, and potentially cost you more in legal fees for the divorce later down the road.

With that said, I do want to point out that filing jointly will reduce your tax return dramatically. Your attorney will likely suggest that you file separately, but also may suggest that the return might be marital property, or at least a part of it (i.e. 1/3, first 4 months of last year).

 

[hercher]

Consult a tax and legal expert. Emotionally, I would choose option 1, but you need to consult with professionals.

 

[DosGatosBrewing]

Separated is still married to the IRS. You had to be legally divorced by 12/31 to file as anything except married. I even filed my ex-wife's tax returns for her during the separation just to make sure they got filed (and tax paid). Don't mess with the IRS. It gets painful in a real hurry.

 

[jmendez29]

Nice guys finish last, stick it to her and keep all the money to yourself, you have earned the right. Been there done that !!!!!!!

This is probably the dumbest advice I could imagine. If there is not currently a fight, there is no need to start one.

I have what I consider to be possibly the easiest divorce anyone could probably hope for. We had everything agreed upon before I consulted a lawyer, let alone went before a judge. The advice my lawyer gave me was that I should get everything in writing and approved by a judge. Just because we get along now, doesn't mean we will for the next 15 years (or however long until your youngest turns 18). Then, if things do go south, you have a document to fall back on. I think this was key to the success of my current friendship with my ex-wife.

With that said, consult a professional. A divorce attorney will likely have the answer you are looking for. And if not, they will be able to get you pointed in the right direction. Like the joke goes, why are divorces so expensive? Because they're worth it. Not just from a cynical/comical perspective, I think it's the truth. A divorce may be the cause of a lot of fights, but the resultant paperwork can stop many more before they even start.

Seriously. Talk to a lawyer.

 

[chipsah]

Separated is still married to the IRS. You had to be legally divorced by 12/31 to file as anything except married. I even filed my ex-wife's tax returns for her during the separation just to make sure they got filed (and tax paid). Don't mess with the IRS. It gets painful in a real hurry.

There are exceptions which allow you to file as Head of Household. Unless I am grossly misreading, I believe this fits my situation.

From http://www.irs.gov/pub/irs-pdf/p17.pdf page 23.

Considered Unmarried

To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. 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 (defined earlier under Joint Return After Separate Returns ).

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. See Temporary absences , under Qualifying Person, later.

4. Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Home of qualifying person , under Qualifying Person, later, for rules applying to a child's birth, death, or temporary absence during the year.)

You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Children of divorced or separated parents or parents who live apart under Qualifying Child in chapter 3, or in Support Test for Children of Divorced or Separated Parents or Parents Who Live Apart under Qualifying Relative in chapter 3. The general rules for claiming an exemption for a dependent are explained under Exemptions for Dependents in chapter 3.

 

[E-Mursed]

We've actually agreed on everything so I don't have a lawyer.....

If you believe for a minute that this statement will not come back to bite you in the ass and haunt you for years to come, you are sadly mistaken and very naive.

Once she figures you are trying to slight her out of a couple thousand dollars, she will be fighting you for every last penny. And not just over this. She will continue to try to get even over this for years and years to come.

Your best bet is to lawyer up....be generous until the divorce....and do every thing in your power to keep the peace until your divorce is final.

JMO

 

[chipsah]

If you believe for a minute that this statement will not come back to bite you in the ass and haunt you for years to come, you are sadly mistaken and very naive.

Once she figures you are trying to slight her out of a couple thousand dollars, she will be fighting you for every last penny. And not just over this. She will continue to try to get even over this for years and years to come.

Your best bet is to lawyer up....be generous until the divorce....and do every thing in your power to keep the peace until your divorce is final.

JMO

I agree. The truth is, I am not trying to slight her out of anything. My return filing HoH is much larger (even making up for the small amount she will owe) than if we were to file jointly.

I do feel like I am trying to keep the peace. In fact, in getting MORE money that is exactly what I thought I was doing.

Anyway, I concede. I will contact a lawyer. Thanks to everyone for the advice. Always appreciated.

 

[gratus fermentatio]

Figured I would come to my best source of advice to toss out this question/scenario.

After 6 years of marriage and two kids, my "soon-to-be" ex-wife decided she wanted to be free and feel independent. Long story short, she cheated on me and moved out of the family home. Both kids stay with me 100% of the time as she rents a room and can't have them spend the night with her. She has agreed to give me full physical custody and pay the appropriate child support. Trouble is, we moved to a new state recently and need to establish residency before we can file the divorce paperwork.

Now that tax time has come around, I told her that I was going to file as Head of Household and exclude her income seeing as the kids are always with me and she has not lived in the family home since April 2012. On the up side for me, the larger standard deduction combined with a single income results in a pretty substantial federal refund for me. However, she will likely end up owing on her taxes because she negligently miscalculated her withholding for 2012. Therefore, she has proposed that we continue to file as married-joint until the divorce is finalized and split the refund.

The way I see it, I have a couple of options and the respective refunds:
1. Be smart. File HoH and take the refund to support the kids. ($7,500)
2. Be nice. File HoH and give her some of the money to help her out. ($7,500 - what I give her)
3. Be stupid. File married-joint and split the refund with her as she suggests. ($5,200 / 2)

There are, of course, variations on each option such as letting her claim one child, but I do not want to set a precedent for the future. I also feel like it was on her to manage her withholding (especially considering she decided she wanted to be independent - which, by the way, is still her only rationalization for her actions).

So... I guess I don't really have a concrete question. But any input would be much appreciated. Thanks in advance.

Screw the *****. Be smart, cut your losses, exclude her from your taxes & the rest of your life. Now go find yourself a 24 yo. hottie & get busy livin.
Regards, GF.

 

[upperNY01brewer]

This is probably the dumbest advice I could imagine. If there is not currently a fight, there is no need to start one.

I have what I consider to be possibly the easiest divorce anyone could probably hope for. We had everything agreed upon before I consulted a lawyer, let alone went before a judge. The advice my lawyer gave me was that I should get everything in writing and approved by a judge. Just because we get along now, doesn't mean we will for the next 15 years (or however long until your youngest turns 18). Then, if things do go south, you have a document to fall back on. I think this was key to the success of my current friendship with my ex-wife.

With that said, consult a professional. A divorce attorney will likely have the answer you are looking for. And if not, they will be able to get you pointed in the right direction. Like the joke goes, why are divorces so expensive? Because they're worth it. Not just from a cynical/comical perspective, I think it's the truth. A divorce may be the cause of a lot of fights, but the resultant paperwork can stop many more before they even start.

Seriously. Talk to a lawyer.

Hardly the dumbest advice !!!! Have you had to go through the courts dealing with a divorce ? If not you don't have a clue that the courts are usually not going to rule in a mans favor, no matter the circumstances and how well you and the future ex are treating each other. Ive dealt with it first hand and have seen many friends in plenty of financial situations come out on the short hand. I say stick it too her because you certainly will need the money on hand for the your lawyer and usually if you are the major bread winner of the relationship and continue to be in a higher tax bracket you can usually be assured that a portion of her lawyers bill will be coming your way by order of the sitting judge handling the case.

 

[KurtB]

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. See Temporary absences , under Qualifying Person, later.

Disclaimer: I am not a lawyer or tax preparer. I am an IT person that likes to make and drink beer, so take this for what it is worth.

You are dealing with the IRS. I am convinced that agency has one purpose - separate you from your money.

Since July 1, 2012, has her name appeared on any piece of mail that was sent to the house (utility bills, bank statements, junk mail, etc.), including any electronic only copies of things like phone, cable or utility bills, even if they are only sent via email? Did your future ex-wife ever have anything accidentally shipped to the house, or did anybody ship something to the house in her name (example: Christmas/Birthday presents for the kids from her parents, but with her name on the shipping label)?

Does she ever refer to the house as anything other than "your house"? If she ever calls it "our house" then she is still claiming ownership/residency and it could come back to bite you.

I strongly suggest talking to an actual attorney. Three ladies in our office are going through similar issues right now as two of them were divorced this past year, and one has been separated for the past 9 months. The two that got divorced have questions about their taxes, but the one that is only separated is having nightmares trying to get her taxes filed correctly. She is glad that her lawyer referred her to a tax attorney that specializes in taxes for separated couples.

I have also shared my desk with an IRS auditor when a company that I worked for was going through a tax audit. One of the most telling statements came when I asked the auditor one Friday if he would be back the next week (he had already been there for 2 weeks looking through all of our accounting records so I figured he had to be close to finished), and his response was simply "Or course, I haven't found anything yet." I was convinced his goal was not to leave until he found enough $$ to justify his existence.