The IRS treats you as married if on the last day of the tax year you still don’t have a final divorce decree or separation agreement. This means you can only choose between the married filing jointly and married filing separately statuses.
If you and your spouse lived apart for the last six months of the year, you may be able to file as head of household when still married. Using the head of household status may save you more in tax than the married filing separately status due to the larger standard deduction you can take and the more favorable tax brackets, but there are a number of conditions you must satisfy in order to use it and only you or your spouse (not both) may do so.
If you decide to file separately until your divorce becomes final, you can only claim dependent exemptions for your children if they live with you for more than half of the tax year. In the event you still live with your spouse, the IRS allows the parent with the higher adjusted gross income to claim the exemptions.
One last thing to consider for the tax returns you file before your divorce is final is that even though filing a joint return will likely save you more in income tax, you are responsible for all tax on the return; the IRS will not allocate the tax debt based on the earnings of each spouse. So if your spouse decides not to pay taxes, you are liable for the amount.
Tax Returns After the Divorce Is Final
In the year your divorce becomes final, your filing options will change. At this point, you are no longer married and must choose between single and head of household. Again, only one person, you or your ex, can file as head of household.
Once your divorce is final and you no longer share a home with your former spouse, you generally must have custody of any child you claim as a dependent. If your former spouse has custody but agrees to let you claim the exemptions, you may do so, but only if the agreement is in writing. Use Form 8223 for this and be sure to include it with your tax return.
Another important issue to consider is your payment or receipt of alimony. The spouse who receives alimony must report it as taxable income, whereas the paying spouse can deduct it.