Domestic Abuse & Taxes: What You Need to Know
According to The National Coalition Against Domestic Violence (NCADV), 1 in 3 women and 1 in 4 men will experience intimate partner violence in their lifetimes. Abuse isn’t just physical: it is also emotional, economic, and other aspects of controlling your life.
If you are in a domestic abuse situation, you may qualify for certain types of tax relief. You are also legally eligible to take advantage of safeguards for abuse victims so that your spouse isn’t alerted to your location or other personally-identifiable information that may have changed while you are fleeing the situation.
Rights and Remedies for Tax Matters
Because financial abuse is often hand-in-hand with domestic violence, taxes are unfortunately part of the picture and you are still legally obligated to file a tax return if you have a situation requiring you to file (or it would behoove you to do so even if you have less income than the filing requirement, such as getting the Earned Income Tax Credit and/or Additional Child Tax Credit.)
Even if you are still married, you don’t have to file a joint tax return if you typically filed one with your spouse. While you can’t use Single or Head of Household status, you can use Married Filing Separately to file your own tax return until your marriage ends in divorce or annulment. You aren’t obligated to file a joint tax return as your spouse.
You may also qualify for what’s known as innocent spouse tax relief, which is when you have relief for additional taxes imposed income that belonged to your spouse and/or errors or misstatements that they made filing jointly which you were unaware of. You may get a tax bill for this income or misstatement even after divorce, so you should be aware of the relief you could qualify for.
What to Do if You Move
Moving far from your abuser is often your only option to ensure your and/or your children’s safety. If you need to move with very little notice, and possibly for a new job prior to doing so, be aware that the 2018 tax reform has currently suspended the work-related moving expense deduction. But if you incurred job-related moving expenses concurrent with domestic abuse in 2017, you may be eligible for a deduction.
In general, you don’t get a deduction for moving expenses for seeking refuge from an abuser. However, you need to notify the IRS that you changed your name and/or address as soon as feasibly possible. This ensures that you’ll receive correspondence from the IRS concerning your taxes and your spouse will not.
Getting More Time to File and Pay Your Taxes
Depending on when you are mitigating your situation, getting your tax return in on time may be one of the last things on your mind. This is especially true if you are also in the midst of a legal name change, move, new job, or other drastic change that will affect your life going forward. Your tax returns are definitely part of that and you might also need time to recover documents you lost when leaving. (You are also allowed to request copies of prior year tax returns from the IRS.)
You can request an automatic six-month extension before your filing due date (April 15th for most individual taxpayers.) In the event you can’t get an extension request submitted in enough time, see if you can request a penalty waiver by informing the IRS agent handling your account that you are a domestic violence victim.
Unfortunately, an extension only gives you extra time to file and not to pay. You can go on an installment agreement if you owe taxes you can’t pay, and you’re also able to ask the IRS to make your account temporarily uncollectible on account of the hardship you’re currently going through.
Rue & Associates is available year-round to answer your tax questions regarding the tax impacts of divorce, injured and innocent spouse claims, and keeping your information confidential if you are seeking respite from a domestic abuse situation. Contact us today to speak to one of our friendly and professional tax law experts.