Filing taxes while you’re separated or in the middle of a divorce can be confusing and stressful—especially if you’re not sure what your legal filing status should be. Many people assume they can file as single once they’ve separated or filed for divorce, but in California, that’s not the case. Until your divorce is finalized with a signed judgment, you’re still considered legally married for tax purposes.

That means you’ll need to file as either married filing jointly or married filing separately—each with its own pros and cons.

In this video, family law attorney Sina Mohajer walks you through your options, what each filing status means, and how to make the smartest decision based on your financial situation. At Mohajer Law Firm, we specialize in helping clients understand the intersection of family law and tax obligations so they can protect their rights—and their wallet—while their case is still pending.

Need help with your divorce or taxes? If you’re facing a divorce and need guidance on taxes, asset division, or other issues, Mohajer Law Firm is here to help. We specialize in family law and will work to protect your financial future.

Transcript:

It’s that time of the year when we need to start preparing to file our end of the year taxes. But what does that mean if you’re in the middle of a divorce or possibly at the conclusion of your case? In this video, we’re going to tackle just that. We’re going to understand the tax implications that are involved during the pendency of your case or after a judgment is entered in the state of California. 

For those who don’t know me, I’m Sina Mohajer with Mohajer Law Firm. We specialize in Family Law, Criminal Defense, Personal Injury and Estate Planning.

In these videos, I like to tackle complex issues and try to simplify it for our viewers in order to give you that knowledge and know-how in order to handle your case more efficiently. So if you like what you hear today, hit that like button. And don’t forget to subscribe, so you’re always informed of any new videos being posted. And without further ado, I welcome you all to our new mini series called A Walk in the Park.

Filing Taxes While Separated or During Divorce

When you’re filing your taxes, you have the option of filing as a single person or married. A huge misconception that I hear today is just because you’re legally separated or perhaps just because you filed for your divorce and you’re going to get divorced, it gives you the right to file as a single person. But that is incorrect and absolutely wrong. You cannot do that.

Just as you can’t get remarried until the judgment is finalized, you can’t file as a single person until the judgment is finalized. So you’re left with two options. Either you file as married, filing jointly, or married, filing separately. And both avenues have its pros and cons, benefits and detriments. So it’s very important to explore each avenue when you’re preparing your taxes to ensure that is the right move to make to get you more back into your pocket and less to the state. 

Asset Division and Its Implication on Filing Taxes

Now, when it comes to asset division, just like any divorce, there’s going to be assets being divided between spouses. But what implications does that have when you’re filing your taxes? For example, you’ve got real estate. If you’re transferring your interest in the community property over to your spouse, that transfer itself is tax free, so you don’t have to worry about it.

But what happens if there is no transfer and you’re actually selling the property to a third party purchaser? Well, then you’re dealing with capital gains tax. But there are exceptions to that. And so it’s very important to understand what is capital gains to ensure that, again, you’re receiving more money in your pocket and less goes out for tax purposes. 

If you’re dividing 401(k)s, pensions, IRAs, those are going to have tax implications as well, and possibly even some early withdrawal fees if you’re dealing with the 401(k). So when you’re dealing with your divorce case and you’re dealing with a settlement, trying to figure out how to divide things, it’s important to keep in mind that just because you’re splitting everything 50-50 doesn’t necessarily mean you’re receiving that amount. 

So you want to ensure that you’re doing the right approach to ensure that more money comes to you and less money goes out to the state.

How to Claim Dependents

What about kids? If you’ve got kids, you’ve got to figure out who’s going to claim the kids on their taxes, right? Well, the IRS doesn’t care who claims them. If you’re the first one to claim them, you get to keep that as a dependent tax write off. So be it. When your spouse files and they try to claim the same children, their filing is going to get rejected.

But family courts are a little different. They don’t care who files first. They’re going to only look at who has the majority time with the kids when it deals with custody. If you’re the primary custodial parent, you have the right to claim the children on your taxes. If you’re not, then you don’t get that benefit.

But claiming the kids plays a role in child support as well. If you get to claim the kids as a dependent, that’s going to change your net disposable income, which means it can fluctuate either getting more in child support or less. But what does that mean when it comes to taxes? Well, the new rules are that if you’re paying child support, you can no longer write that off. Sorry, folks. However, if you’re receiving child support, you’re no longer being taxed. That is tax free money. And the same rules apply when you’re dealing with spousal support or alimony.

Consult with a CPA

Now, just like family court, if you’ve got complex issues—it’s always important—I urge my viewers to always consult with a seasoned family law attorney. There’s so many nuances and loopholes or different strategies to take. You’re doing yourself a disservice.

Same thing applies when dealing with taxes. There are so many different nuances and implications or even loopholes that you may not even know about that it’s important to consult with a CPA to ensure that you’re receiving the most back and you’re paying less to the state.

Contact Mohajer Law Firm for Guidance During Divorce

So if you have questions about your divorce case or even moving forward on your taxes or how to settle your case completely, I welcome you to call our office and schedule a consultation. I’m happy to sit down with you one on one to discuss just that. And if you like the content of this video, don’t forget to hit that like button. And please don’t forget to subscribe, so you’re always informed of any new videos being posted.