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Divorcing couples may want to change their tax habits

Texas couples who file their federal income tax returns jointly do so for many reasons, but separate filings could be beneficial to those who are in the middle of a divorce. Couples who have separated may have already split their finances or property assets, for instance, and in such cases, it might simply be easier for each individual to file on their own.

Filing separately prevents couples from taking advantage of certain benefits, such as lower tax rates. It also means that soon-to-be ex-spouses need to decide together if they want to itemize or receive the standard deduction, as they have to follow the same option. Although filing separate may be more complex, it could also limit liability for individuals who suspect their spouses of wrongdoing or inaccurate payment.

Married couples who file separately will not be entitled to receive certain federal income tax credits. Some states may mandate that divorced couples complete extra filing procedures.

Separation can be tough, and high-asset divorce proceedings may make it even more convoluted. Divorces that include assets like retirement plans, insurance policies, real estate and businesses are at times contentious, and spouses may find it harder to come to an amicable resolution when they can't decide who should receive what items. In some cases, it is difficult to properly gauge the value of assets like trusts or depreciating homes, which could lead to agreements that are unbalanced. Both parties in a divorce should have separate legal representation when trying to figure these and other matters out.

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