A tax obligation is a debt you owe to a tax authority, such as a city, state, or the federal government. In California, divorcing couples divide tax obligations just like other property.
Separate Tax Obligations
Sometimes, the tax is owed only by one spouse. If that’s the case, you’ll have it confirmed as that spouse’s obligation. Usually, this is the case when the tax that one of you owes is from before the marriage, or if you filed separately.
Joint Tax Obligations
If the tax return is filed jointly, the tax obligations are owed by both spouses equally. There are no instances where a couple files jointly on their taxes and are not jointly obligated to pay those taxes.
Courts will usually divide these obligations 50/50 between spouses, but if you will be handling your divorce outside of court, you have the ability to divide the tax obligations in whatever way makes the most sense for your unique situation. In your divorce agreement, you should be clear about who will pay tax obligations. You can divide this in any way that makes sense for your situation.
What Happens If Someone Doesn’t Pay
It’s important to remember that, whatever agreement you reach about who will pay, your original liability doesn’t change. You cannot transfer your joint liability to one spouse without the written permission of the tax authority to whom you owe it. If the obligation goes unpaid, you may both incur fines and penalties.
For that reason, you need to decide what happens if someone doesn’t pay after you divide the obligation. For example, perhaps the spouse who didn’t pay will pay the associated extra costs. Perhaps other penalties will be included in your divorce agreement. Talk through these consequences with your mediator and decide together what makes sense.