Getting divorce in 2023 (to be filed in Jan)

[dbekkerman]

My wife and I are headed for divorce but for now, we are married and just recently split into separate households (in Aug 2022). We are on amicable terms and would probably be filing the return jointly (as married) for 2022 but starting from the year 2023 - when I expect the divorce be filed and finalized- we would be filing separately.

I am the primary on the joint return but my wife is the major AGI contributor and she is self-employed. I have a few questions based on the technicality of TurboTax(TT)

1. Because my wife is self-employed, when I change in marital status in TT from married to say "Single", will the TT preserve all her business parts (amortization of assets, etc) and allocate her business into a separate account or will it just drop her off from my TT account?

2. Because she was the major contributor to AGI, she also paid most of the taxes. We'd normally carry over the tax refund into the next year instead of cashing it out so I kind of wonder if TT would allow me to allocate how much of the tax refund that would carry over from 2022 into 2023 belong to me vs. to my wife's ?

Thank you 🙂

[xmasbaby0]

If you are still legally married at the end of 2022, your filing choices will be married filing jointly or married filing separately.   Filing "single" will not be an option for 2022 for either of you.   And since you lived together for more than six months in 2022 neither of you can file as Head of Household.

If you are divorced by the end of 2023 then when you file a 2023 tax return---in 2024--- you can either file as Single or --if you are the custodial parent of the children--Head of Household.   

When you are divorced you will each need your own accounts and user ID's, and your finances and tax returns will completely independent of each other.

[Critter-3]

First ... if you are still married as of 12/31/22 then you cannot file as single ... only married jointly or married separately unless one or both of you qualify for HOH.  Next ... if you will file separately you should each use a new TT account ... do NOT try to reuse the current account.

1. Because my wife is self-employed, when I change in marital status in TT from married to say "Single", will the TT preserve all her business parts (amortization of assets, etc) and allocate her business into a separate account or will it just drop her off from my TT account?    Again your marital status for 2022 cannot be single if you are still married as  of 12/31.  You each need to use new TT accounts.  

2. Because she was the major contributor to AGI, she also paid most of the taxes. We'd normally carry over the tax refund into the next year instead of cashing it out so I kind of wonder if TT would allow me to allocate how much of the tax refund that would carry over from 2022 into 2023 belong to me vs. to my wife's ?   No it will not/can not do this ... on the 2022 joint return you need to take the refund and split it any way you agree to ... do NOT apply it to the next year's return if you choose to file a joint 2022 return.  If you choose to file separately this will get messy as the IRS would automatically apply all of the prior year refund to the primary taxpayer's SS# only  so if you try to split it onto 2 separate returns you will have to deal with IRS letters and/or mail in the return with an explaination which may or may not be noticed.    If you can agree you really should file one more joint return using the current account that you have and for the 2023 return start new accounts for each of you ... do NOT try to use the joint account going forward even though you are tempted to do so.   ALSO  make sure you each save PDF files (with and without the worksheets) & the .taxfiles  of all the returns in this current account before you abandon it in the future.  

[dbekkerman]

Hi there,

Thank you for reply 🙂

My question is more in the line of splitting credit carryover and business assets upon the divorce and how to force TT to "move" things rather than re-create. Say for the business assets, they are already partially amortized so re-creating new would be a hassle as I have to account for already re-couped portion. I wonder if someone who works for TT would be able to give me more info on it ?

[dbekkerman]

Thank you for the reply 🙂

I know all about the filling statuses  and it is not an issue.  My issue is in splitting credits preserving all business information that already been entered into TT rather then re-entering it for my spouse when we divorced

For example, I can save the return on PC and re-upload it into CD-version so I can have 2 copies - but will TT preserve my spouse's info if I delete her from my own return ? 

[VolvoGirl]

Sorry you will have to start fresh with 2 returns.  Don't try to copy or transfer your Joint return into a Single returns.  You can not remove the primary spouse listed or change the spouse to be primary.  

Removing a spouse is not recommended
https://ttlc.intuit.com/community/family/help/how-do-i-remove-a-former-spouse-from-my-return/00/2720...

Here's some other links.  They might be old I haven't checked them yet.

Getting Divorced article
https://turbotax.intuit.com/tax-tips/marriage/getting-divorced/L20NC66cf

Video tips for Divorced couples
https://turbotax.intuit.com/tax-tips/marriage/video-tax-tips-for-divorced-couples/L8YqvF7p5

And see what AGI to use
https://ttlc.intuit.com/community/agi/help/what-agi-should-i-enter-if-i-m-recently-divorced-or-widow...

[Opus 17]

@dbekkerman 

You can’t do what you want to do using TurboTax online.

Typically, it is recommended that each TurboTax customer start a new return when they change marital status; you and your spouse would each start a new return from scratch and manually enter any carryover items.

To avoid doing this, you would need to be using TurboTax installed on your desktop computer (from a CD or download) for 2022 and 2023.  Then, after filing the joint 2022 return, each spouse can be provided with a copy of the tax data file.  In January 2024, you start your 2023 return using the 2022 file as the base, go into Forms mode, and delete all of the information, business schedules, depreciation worksheets, and so on, that belong to your spouse. Your spouse would start their 2023 tax return with the 2022 file and delete everything that applied to you.

This is a bit risky, and not recommended by Intuit, because of the risk of leaving behind some of the information from your ex spouse. And you can’t do this with TurboTax online because you can’t view the forms and worksheets in order to selectively delete the ones you need to delete.  Depending on your comfort level with income tax forms, you might want to see a tax professional in 2022 in order to have the professional help set you up for the future.  If you know what you are doing, and you are competent doing it, and you triple check your work, then sharing the 2022 data file and making selective deletions when you start your 2023 return, may work for you.

[Opus 17]

@dbekkerman 

Regarding your refund, the IRS does have a form that you can use to allocate a tax refund between two different bank accounts, and this is available when you e-file.

[Opus 17]

@dbekkerman 

“For example, I can save the return on PC and re-upload it into CD-version so I can have 2 copies - but will TT preserve my spouse's info if I delete her from my own return ? ”

You can do this but it is not recommended. The reason is that there is a lot of stuff that should be deleted and if you don’t get everything, you could have a problem down the road.

It is possible for your spouse to start their 2023 tax return using the CD version, import the 2022 file, and then delete everything that applies to you. You would prepare your 2023 return using the CD version, import the 2022 file, and then delete everything that pertains to your ex spouse.

But as stated, it’s not officially recommended, because of the risk of making errors.

[dbekkerman]

Thank you to all the members who responded to my original posting. I appreciate your input  ... very helpful indeed 🙂