Kim Isaac Greenblatt reminds you that when it comes to deciding what kind of status you can file at tax time, you should make it your business to plan for taxes before the end of the year. The reason is that your marital status is usually determined by what your status is as of the last day of the year. If for example you were married all the way from Jan 2009 thru Dec 30 2009 and were divorced as of Dec 31 2009, you are considered Single. If you had raised your children by yourself and were actually living separately and there may even be a court order keeping your ex from you, you might be able to qualify for Head of Household.
Nobody bothers to tell parents or people these things and generally as sad as it is to talk about, divorces need to be planned for sometimes to avoid a bad tax sting for both sides in the separation. If both sides are talking to one another, they can help mitigate the damage if they can hold on to staying married till at least Jan 1 or 2 so they can both benefit from the Married Filing Jointly status (MFJ). If one who is taking care of the kids cannot claim Head of Household (HoH) the only other recourse is Married Filing Separately (MFS) and that sucks.
A lot of benefits and tax breaks that work for couples or Head of Household are denied because of the MFS status. I know it stinks but you need to write your Congress person to get it changed and I doubt with the bruhaha over family values that the tax status law will be changed in the near future easily.
If you know anybody planning on getting married as well, please tell them that if they wait till Dec 31 and get married prior to New Year’s Eve, they are considered as if they were married the whole year. They should also plan on having their incomes lumped together and they need to plan it if they can (unless the elope) so they aren’t thrown into a higher tax bracket the first year.
My book, Bad Tax Idea Good Tax Idea available from Amazon goes into detail with that and other great suggestions. You may want to look for it, order it and let me know how things are working out for you.
Be well people and stay healthy. Without good health, your life gets taxing and you may have a happiness deficit.
October 15 2009 Mid Day
Kim Isaac Greenblatt
Marital Status and Filing Is An End Of Year Thing
[...] Marital Status and Filing Is An End Of Year Thing [...]