Eva, Great question from a reader.
I have a client in a similar situation. They are separated but not yet divorced. The other spouse has filed all returns as MFS. Now the client needs to file for 5+ years.
Reconstructing the income wasn’t terribly difficult, but now we need to split the tax deductions for the mortgage and property taxes – which is the difference between owing (+ penalties and interest) or refunds. We had to send a letter to the other spouse’s attorney and tax accountant outlining our position what is the bare minimum of tax information we need to share.
To date, the other parties have been non-responsive, and as a result we cannot establish with certainty how the deductions are split. So these returns will most likely end up in exam, which is exactly where I want them to be since the Service has much more power to compel taxpayers to share information than I do.
The comments above about community property states is a good one! Also, she should order her Social Security report if she doesn’t get one annually, to verify her record of earnings and SS credits for the years. Also, tax liabilities should be part of the divorce negotiations. How often do clients think to negotiate that point? They should settle now while they can.
And his comments prompted me to set up a new forum for you – TaxMama’s Parlor. (Just click on the join button.)
This is a great start for a discussion on what information and tax issues need to be addressed during a divorce. So, I’ve moved our Tax Guide’s post to our forum – so you can add your own ideas. We’ll turn the suggestions into a free downloadable checklist to use during divorce! Give it to your attorney, your tax pro – or even your about-to-be ex!
And remember, you’ll find answers to questions about divorce issues and all kinds of tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.]
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