Tax filing status while separated

[jenguin777]

My ex-husband and I signed before a notary 2 documents 1) a Separation Agreement and Property Settlement and 2) a Free Trader Agreement on May 20th of last year (2009). We were married on 11/2/1996 and we both lived in the home he purchased and paid for (I was never on the loan or deed of the house - I signed a prenup relinquishing any rights to his home). I purchased a new home and closed on 5/29/2010 and have lived in my new home since then. Neither my ex-husband nor I have any children or dependents.

In our separation agreement , we agreed that we would cooperate with each other in the filing of our income taxes for 2009. Our situation was special because he received an SSI settlement with proceeds going back to 2005. My husband decided not to honor our cooperation clause, went ahead and saw a CPA on his own, filed Married Filing Separately because he said it would save him $6000 - 7000 in taxes. He said he didn't care how I filed.

I was under the impression that because we had a notarized separation agreement, I could file as single (and thus qualify for the $8000 new home buyer tax credit - again, I was never on the loan or deed for my ex-husband's home). I have seen conflicting statements as to whether or not this is true - some forums say there is another kind of separation agreement that needs to be signed by a judge and that only with this type of separation agreement can I file single. Can you tell me if I can file as single with the separation agreement I have? If there is a special type of separation agreement for tax purposes, can I obtain one now, and does it require my ex-husband's consent?

[Erin Clarey]

If you are not divorced you cannot file as single, and must file as married filing separately. There is no special type of separation agreement that changes your status to unmarried, only a decree of absolute divorce.

[stepmother]

You are still legally married and therefore must file as married, either separate or joint. To my knowledge and unless something has changed, there is nothing that can be signed except the absolute divorce for you to be able to file single. NC does not recognize "legal separation". Since you are considered separated the day you begin living separate and apart, you do not have to have a separation agreement to be granted a divorce.
I'm not certain what the SSI settlement is or what exactly cooperation was agreed on. Legally, you are married and must file so. His CPA would have told him that. He may be required to divide any refund, but the time frame is a little tricky for this. Normally, the IRS would consider that the status for half the year or more to be the case. If you separated in Feb and received your absolute divorce in Feb 2010, you would not be considered married for 2010. If you separated in Oct and received your absolute divorce in Oct 2010, then you would be considered married for 2010. Since you separated so close to the middle of the year, it would take cooperation with the other party in the filing of your 2010 taxes, if you have not yet received your absolute divorce. Maybe this is what the clause in your agreement means...

[jenguin777]

Thanks very much for this information. I'm glad I erred on the side of caution and filed Married Filing Separately. The "cooperation clause" in my separation agreement was intended to mean we'd work out whether to file Married Filing Jointly or Married Filing Separately (at the time the separation agreement was drafted, it didn't even enter my mind that I could even consider filing single - that thought only materialized this year when I actually started doing my taxes and saw a plethora of opinion on this topic on the web - now I know this is NOT possible).

We filed Married Filing Jointly the entire time we were married. But neither of us knew at the time our separation agreement was drafted which filing status would be best because 1) I was in the midst of buying a house and hadn't closed yet and 2) my husband hadn't received his 1099 from SSI yet. So we couldn't "spell out" in our separation agreement which status we would use. It's unfortunate that my ex decided to breach the spirit of cooperation by going and filing Married Filing Separately, and thus leaving me no other choice but to do the same, because I believe both of us would have benefitted from filing Married Filing Jointly. But that's water under the bridge now.

I have no interest in any refund my ex may or may not be entitled to. We kept our finances separate during our marriage and we agreed on a property settlement when we separated. What I will do is start exploring the steps for actually filing for divorce now so that I can have the process completed and on the books within the first half of this year (I assume first half of the year = 1/1/2010 - 6/30/2010). That way, I can file single for tax year 2010.

Many thanks again for your counsel.

[Erin Clarey]

You are most welcome. I wish you all the best.