When you announced to your friends that you and your wife were separating, we’re guessing several of your friends told you, “You’re crazy!” If you existed only in the realm of movies, your fast response would, of course, be, “So crazy, it just might work!” After separating from your wife, so many things seem crazy. Childcare. Spousal support. Taxes. And yet, you can make all of that work. Even taxes.
Should You File Jointly or Separately During a Separation?
In Virginia, you are considered legally married until you have a divorce decree. No such thing exists in Virginia as a “legal separation.” This means both parties to the separation have the decision-making power to agree on their tax filing status:
- Married filing jointly
- Married filing separately
Obviously one of you cannot file “jointly” if the other does not agree. Your wife cannot file separately and expect you to also file for both of you. That would be … crazy.
A bit of psychology as well as economics comes into play here. If you and she do not get along, barely speak, and agree on nothing, then file separately. Your refunds will probably be lower or the amount you each must pay will probably be higher. You could simply consider that the cost of not doing business with each other.
Most law firms handling separation and divorce, including ours, would suggest you file for the most advantageous position, no matter the animosity or positivity between you. Of course the ideas offered here do not constitute legal advice for your particular situation; seek a tax attorney or accountant for that.
We can say, though, that working together on something as cold and neutral as taxes is:
- Good practice for the tasks ahead
- A great way to test the waters of communication
- Your best method of avoiding run-ins with the IRS
If necessary, have your divorce attorney make an offer to her divorce attorney to file jointly. Her attorney may counter to file separately. It is yet another point of disagreement, but it comes with a ticking clock: Wednesday, April 15, 2020 (or April 15th of most years).
You should enshrine whatever you decide in a separation agreement. A separation agreement is an idea that is so crazy, it just might work usually works.
Your Separation Agreement
Though the courts in Virginia do not deign to dictate a legal separation, they will honor a separation agreement since it is contract law. Codifying in the agreement whatever you and your departing wife decide about tax filing will protect both of you. You of course use the agreement to also put in the usual stuff about each other’s rights and obligations during the separation period and divorce process:
- Division of debts,
- Care of children,
- Parenting time schedules,
- Avoiding negative talk about the other spouse,
- Equitable division of assets,
- And so on
Your attorney may advise you that the separation agreement also becomes, or forms the foundation of, the property settlement agreement. At divorce, this document smooths the way for the Virginia Circuit Court judge to expedite the decree.
The Standard Deduction
Should you choose to file separately, current tax law as amended by the Tax Cut and Jobs Act (TCJA) has greatly simplified divvying up deductions, since for most couples the standard deduction eclipses itemized deductions:
- Married filing jointly: $24,400
- Married filing separately: $12,200
These deductions are for tax year 2019 (filing in 2020). They will climb in future years, so for 2020 (your 2021 filing) the numbers will be $24,800 and $12,400, respectively.
Unless you have very large medical expenses (above 10 percent of your Adjusted Gross Income [AGI]) or a young mortgage (or a mortgage on a second home, don’t forget!), you will likely find these standard deductions suitable to your situation.
Whichever path you and your spouse choose, we again emphasize two important details that sometimes become obscured in the back-and-forth weeks and months of a divorce proceeding:
- Do not mess with the IRS
- Wednesday, April 15, 2020 is a real number
No matter what, even if filing separately costs you a little more in taxes, file on time. Avoid trying to solve your tax filing disagreement for yourselves. That would be crazy and is unlikely to work. If your wife is uncooperative, file separately on time and leave her to resolve her own filing.
While your divorce attorney is unlikely to also be a tax attorney, the network of legal resources can connect you with professional advice from either an accountant or tax attorney as your situation requires.
Separation, divorce, paternity and every other aspect of Virginia family law, including taxes, can make a man crazy. Avoid going crazy. Contact the experienced attorneys at The Firm For Men. Reach us online or by telephone at 757-383-9184. We specialize in helping Virginia’s men stay sane.