Assignment 3

Jack and Jen are married. They have 2 minor children. They will divorce in 2023 and they have asked you for advice on the tax consequences of the divorce.

Explain what filing status each of them will use in 2021 (the divorce will be final by the end of the year). You will need to explain (1) the filing status and (2) what requirements must be met for a more favorable status of HOH and (3) which of them, neither of them, both of them, will qualify for the more favorable status.

Note that when you are asked for tax planning advice it is almost always with respect to a set of facts that can be changed because they have not yet happened. So your conclusion/advice can be conditional, that is, conditioned on the taxpayer taking certain steps or satisfying certain requirements.

So, you do not say But you havent told me all the facts!!!! because part of your job, and your value as a tax planner, is to help the client develop the facts.