Divorce and its associated tax issues can be difficult. In most cases, neither spouse can file as single until the divorce is final. A joint return generally offers the lowest tax bracket, but each spouse is then liable for the other's tax liability. The "innocent spouse" provisions of tax law offer some protection to spouses who do not know about certain income and some relief from the responsibility for the other's taxes.
One way for divorcing couples to avoid responsibility for the other's tax liability is to choose the married filing separately status. However, tax rates are higher, several potential credits may be lost, and if your spouse itemizes, both must itemize.
Couples with children who lived apart during the last 6 months of the tax year have another option. The spouse who pays the majority of household costs for a home that was also the children's home for more than half the year can file as head of household, which offers several additional credits over married filing separately and lowers certain marginal tax rates. Furthermore, the standard deduction for head of household filers is higher than for married filing separately or single filers.
The custodial parent is always entitled to the new $500 non-refundable credit for dependents who do not qualify for the child tax credit since the dependency exemption for each child has been repealed under the Tax Cuts and Jobs Act of 2017, through 2025.