Requesting a tax extension in USA when not sure of filing status
April 1, 2014 7:07 PM Subscribe
How do I request an extension to file my income taxes when I'm not sure if I will be filing as "married filing jointly" or "married filing separately" and if separately, what deductions/exemptions, if any, I may be entitled to.
You are not my accountant, tax advisor or attorney. I'm in the middle of a divorce (we have had separate households/finances for the entirely of 2013). Everything is contentious including whether or not we should be filing our taxes as married filing jointly or married filing separately. There is no chance this will be resolved by April 15th so I need an extension. I think it's safe to say that we will be married filing separately but we haven't agreed who gets which exemptions, whether certain monies he paid me are child support, spousal support or contributions to the mortgage of the house we held jointly until September 2013, or who will claim our son as a dependent. What is the best way to estimate my tax liability (yes, there will probably be one no matter which way I file) in order to request an extension when I'm not sure of my filing status or my deductions/exemptions? More importantly, because I don't really understand the tax code, are there some exemptions/deductions set by law? E.g., I have not kept track of who's house my son has been at for the majority of nights in 2013 -- does that mean his Dad, as the higher income earner, will automatically be able to claim him as a dependent? What happens if we both claim him as a dependent? Should I play it safe and not claim him as a dependent and not claim any deductions and then revise my taxes once this is all worked out? Aargh!!
You are not my accountant, tax advisor or attorney. I'm in the middle of a divorce (we have had separate households/finances for the entirely of 2013). Everything is contentious including whether or not we should be filing our taxes as married filing jointly or married filing separately. There is no chance this will be resolved by April 15th so I need an extension. I think it's safe to say that we will be married filing separately but we haven't agreed who gets which exemptions, whether certain monies he paid me are child support, spousal support or contributions to the mortgage of the house we held jointly until September 2013, or who will claim our son as a dependent. What is the best way to estimate my tax liability (yes, there will probably be one no matter which way I file) in order to request an extension when I'm not sure of my filing status or my deductions/exemptions? More importantly, because I don't really understand the tax code, are there some exemptions/deductions set by law? E.g., I have not kept track of who's house my son has been at for the majority of nights in 2013 -- does that mean his Dad, as the higher income earner, will automatically be able to claim him as a dependent? What happens if we both claim him as a dependent? Should I play it safe and not claim him as a dependent and not claim any deductions and then revise my taxes once this is all worked out? Aargh!!
what humanfont said. there's a one-page form you file before 4/15, enclosing a check which brings you up to 90% of your estimated tax liability, and it buys you another six months. i file it every year because i figure there's a 50% chance i'll die after 4/15 but before 10/15, and then it's apres moi le deluge, baby.
posted by bruce at 7:40 PM on April 1, 2014 [2 favorites]
posted by bruce at 7:40 PM on April 1, 2014 [2 favorites]
Nonfiling is worse than nonpayment, so at the very least make sure that you file the extension. As far as estimating--if you can run what the amount would be without him, then you don't file the return with that amount, you just send them a check for that much. Then when you really file, if you end up owing less, you get a refund. If you're in a hardship situation, there's a provision for that. But you can underpay a little without it being a problem, and even if you underpay a little more than that, the fees aren't disastrous. But once you get the extension in and an estimated payment, the specifics become much less urgent.
I am not a lawyer and have no personal experience with divorce, but the impression I have gotten from clients in this situation before is that often which parent is going to get to take the dependent is actually put into the divorce settlement--a lot of people seem to alternate. It is, at any rate, a totally legit thing to bring up in that negotiation, to settle it in an official way.
posted by Sequence at 9:05 PM on April 1, 2014 [1 favorite]
I am not a lawyer and have no personal experience with divorce, but the impression I have gotten from clients in this situation before is that often which parent is going to get to take the dependent is actually put into the divorce settlement--a lot of people seem to alternate. It is, at any rate, a totally legit thing to bring up in that negotiation, to settle it in an official way.
posted by Sequence at 9:05 PM on April 1, 2014 [1 favorite]
Former IRS Tax Examiner, this advice is my own and not that of the Service.
Ideally, you and your spouse should calculate your tax liability for both cases of Married Filing Jointly and Married Filing Separately and choose whichever gives you both the lowest tax burden.
Extension:
Definitely file a Form 4868 and estimate your tax liability as humnafront has suggested.
Determining Custody for Dependency Exemption:
You really, really need to figure out how much time your child spent at your house and how much time your child spent at your spouse's house in order to figure out who is the custodial parent for the Residency Test. That is to say that in order for your child to be a qualifying child for your dependency exemption your child must have lived with you for more than half the year. From Publication 504, a child of divorced or separated parents is the qualifying child of the custodial parent.
Now, all hope is not lost even if you are the non-custodial parent. Your child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true (Again from Pub 504):
1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of the year, whether or not they are or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of the year.
4. The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return.
Does the spouse with higher income automatically get the Dependency Exemption?:
Short answer, no. The only case where the spouse with the higher adjusted gross income would automatically receive the dependency exemption is in a case where the qualifying child lived with both spouses the same number of days with each parent in a tax year.
What happens if both spouses claim the same child for a dependency exemption?:
Based on my experience, this could happen: The spouse that files second would have their return flagged because they are claiming a dependency exemption for a child who has already been claimed as a dependent by another taxpayer, and it would end up on a Tax Examiner's desk. That Tax Examiner would then get a copy of the other taxpayer's original return and send a letter to the second taxpayer asking for documentation proving that the second taxpayer is entitled to the dependency exemption.
What happens next depends on the correspondence received back from the second taxpayer. If the second taxpayer provides suitable documentation (divorce decree, for example) the IRS would adjust the other taxpayer's account to remove the dependency exemption, and send them a bill. Then the IRS would adjust the second taxpayer's account, and give them a credit for the dependency exemption.
It is also possible that the other taxpayer is entitled to the dependency exemption, and the second taxpayer is not, and both accounts would be adjusted accordingly.
What should you do?:
You are an adult taxpayer, and only you can decide what to do.
I would make a great effort to calculate how much time your child spent in your home in order to figure out if you are the custodial parent for the dependency exemption.
You definitely could file with no dependency exemptions or deductions and then amend your return on Form 1040X. A good reason for amending your return might be "Taxpayer filed their original return with the best information available at the time but additional information has become available that allows for filing a more complete tax return."
You also could file a return claiming your child as a dependent before your spouse does, then Dad would have to prove he is entitled to the dependency exemption because then he would be the second person to claim your child.
You should also hire a lawyer.
I'm sorry that you are going through this, and sadly this is not really an unique situation.
posted by Rob Rockets at 9:11 PM on April 1, 2014 [6 favorites]
Ideally, you and your spouse should calculate your tax liability for both cases of Married Filing Jointly and Married Filing Separately and choose whichever gives you both the lowest tax burden.
Extension:
Definitely file a Form 4868 and estimate your tax liability as humnafront has suggested.
Determining Custody for Dependency Exemption:
You really, really need to figure out how much time your child spent at your house and how much time your child spent at your spouse's house in order to figure out who is the custodial parent for the Residency Test. That is to say that in order for your child to be a qualifying child for your dependency exemption your child must have lived with you for more than half the year. From Publication 504, a child of divorced or separated parents is the qualifying child of the custodial parent.
Now, all hope is not lost even if you are the non-custodial parent. Your child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true (Again from Pub 504):
1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of the year, whether or not they are or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of the year.
4. The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return.
Does the spouse with higher income automatically get the Dependency Exemption?:
Short answer, no. The only case where the spouse with the higher adjusted gross income would automatically receive the dependency exemption is in a case where the qualifying child lived with both spouses the same number of days with each parent in a tax year.
What happens if both spouses claim the same child for a dependency exemption?:
Based on my experience, this could happen: The spouse that files second would have their return flagged because they are claiming a dependency exemption for a child who has already been claimed as a dependent by another taxpayer, and it would end up on a Tax Examiner's desk. That Tax Examiner would then get a copy of the other taxpayer's original return and send a letter to the second taxpayer asking for documentation proving that the second taxpayer is entitled to the dependency exemption.
What happens next depends on the correspondence received back from the second taxpayer. If the second taxpayer provides suitable documentation (divorce decree, for example) the IRS would adjust the other taxpayer's account to remove the dependency exemption, and send them a bill. Then the IRS would adjust the second taxpayer's account, and give them a credit for the dependency exemption.
It is also possible that the other taxpayer is entitled to the dependency exemption, and the second taxpayer is not, and both accounts would be adjusted accordingly.
What should you do?:
You are an adult taxpayer, and only you can decide what to do.
I would make a great effort to calculate how much time your child spent in your home in order to figure out if you are the custodial parent for the dependency exemption.
You definitely could file with no dependency exemptions or deductions and then amend your return on Form 1040X. A good reason for amending your return might be "Taxpayer filed their original return with the best information available at the time but additional information has become available that allows for filing a more complete tax return."
You also could file a return claiming your child as a dependent before your spouse does, then Dad would have to prove he is entitled to the dependency exemption because then he would be the second person to claim your child.
You should also hire a lawyer.
I'm sorry that you are going through this, and sadly this is not really an unique situation.
posted by Rob Rockets at 9:11 PM on April 1, 2014 [6 favorites]
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posted by humanfont at 7:36 PM on April 1, 2014 [1 favorite]