Separation can complicate tax filings for residents living in Maryland. Even without a divorce decree in place, financial and filing decisions made during separation can have lasting tax implications.
This guide explains how to select the correct filing status, claim deductions, and comply with rules in Maryland when preparing your taxes.
1. Determine Your Filing Status
Filing status depends on your marital and legal status as of December 31 of the tax year. Status options include:
- Single: For legally separated or divorced individuals at year-end.
- Head of Household: Available to those paying over half the household expenses and supporting a qualifying dependent.
- Married Filing Separately (MFS) or Married Filing Jointly (MFJ): Applies only if still legally married on December 31.
If your divorce isn’t final and you are not legally separated from your spouse, the IRS still considers you married. Most couples will choose MFJ or MFS. Because Maryland does not recognize legal separation, your filing status is determined by federal tax rules.
2. Analyzing Joint vs. Separate Returns
You’ll need to weigh the pros and cons of MFJ versus MFS:
- MFJ often offers the lowest tax liability and access to deductions and credits unavailable to separate filers.
- MFS protects you from shared liability if your spouse has undeclared income or questionable deductions.
Filing MFS and then filing an amended MFJ return may be possible within the time limits of the IRS. Consult a family law attorney for details specific to your case.
3. Filing Maryland State Taxes
If you and your spouse file a joint federal return but choose to file separately in Maryland, you must still file a Maryland return that reflects your share of income and deductions. The state requires you to split income proportionally and report separate deductions, following the Comptroller’s instructions. You can file using Maryland iFile or paper forms.
4. Claiming Dependents and Credits
Custodial parents often claim dependents and child-related credits. If custody is shared, IRS tie-breaker rules apply.
- Filing as Head of Household may qualify you for a higher standard deduction and lower rates than Single or MFS status.
- Alimony paid under agreements signed before 2019 remains deductible; for agreements in 2019 or later, it is not.
State-level rules may also affect deductions. These details are outlined in IRS Publication 504 and federal divorce and separation guidelines.
5. Common Pitfalls to Avoid
Incorrect filing status: Filing as single when still married or legally unmarried can trigger IRS audits.- Unclaimed credits: Missing out on head-of-household status or child tax credits can result in thousands of dollars in lost benefits.
- Alimony oversight: Changes made after 2018 affect the deductibility and reporting of alimony income.
Planning can prevent expensive mistakes.
6. Timing Your Return
If your divorce isn’t finalized by December 31, you’re considered married for that tax year. A finalized divorce means you may file as Single or Head of Household for that year.
Pro Tip: If separation is likely to take longer, request a filing extension to choose the most favorable status once the divorce is final.
7. Keep Detailed Records
You should maintain certain records in case your return is ever reviewed or audited. Keep documentation such as:
- Divorce or legal separation agreement
- Child custody schedules
- Alimony payment records
- Receipts for deductible expenses
- Evidence supporting filing status (proof of dependents, separate residences, etc.)
Tax Filing Summary Table
The following Table summarizes when to use each filing status and the benefits and considerations that they present.
|
Filing Status |
When to Use | Benefits & Considerations |
| Married Filing Jointly (MFJ) | Still married and financially united |
Lowest taxes, full credits/deductions |
|
Married Filing Separately (MFS) |
Still married but separate finances | Liability protection, higher rates, limited deductions |
| Head of Household | Separated or divorced, supporting a child, paying >50% household costs |
Higher deduction than Single or MFS |
|
Single |
Legally separated or divorced by year-end |
Standard filing, may miss dependent-related credits |
Consult a Professional During Separation
Filing taxes during a separation can lead to complications and confusion with your filing status, deductions, and benefits. An experienced Maryland family law attorney can help you understand how separation agreements, child support, alimony, and custody affect your federal and state tax returns.
Partner with Milstein Siegel to Make Sure Your Tax Filing Is Correct
If you live in Maryland and are separated from your spouse, you may have difficult tax decisions. At Milstein Siegel, we help clients in these complicated situations understand how separation and divorce affect their federal and Maryland tax obligations.
Contact us for a private consultation to discuss your tax situation and determine your legal options. Call (410) 760‑9433 today or request a consultation online.