Divorce:  There are many issues in a divorce which can seriously effect your income taxes.  These include, but are not limited to:

Joint and several liability:  Regardless of the assurances your attorney put in your divorce decree you are BOTH responsible for ALL taxes due on joint income tax returns.  The IRS is not bound by your spouse's assurance of payment of all taxes due.  They will attempt to collect these taxes from both of you until they are paid.

Alimony or spousal support: The amount deducted on the return by the payer and the amount reported as income by the recipient MUST be equal.

Dependent exemptions:  The exemptions for the children may be negotiated between the two parties.  The custodial parent may release the exemptions to the non-custodial parent.  The non-custodial parent must attach Form 8332, or a copy of the release written into the divorce decree, to his, or her, tax return.  These exemptions are particularly important if one parent has income high enough to reduce, or eliminate, the benefit of the exemptions.

Mailing address:  It is very important that the IRS, and your state tax department, be notified if there are separate addresses for spouses.  They will send notices regarding joint tax returns to the last address they have for the individual listed as the "taxpayer" on the return.  If you fail to notify them that you have moved you may be unaware there is an outstanding liability until your current tax refund, bank account, or wages have been garnished.

Innocent spouse;  If you filed a joint tax return you may be relieved from some, or all, of the liability if the IRS determines that you are an "inncont spouse", that you were unaware of any unreported income earned by your spouse.  This is a very subjective designation and you must request the relief from the IRS.


Death:

Final income tax return:  The income earned by a deceased individual between January 1 and the date of death must be reported and the income tax must be paid.  This return is generally filed by the executor of an estate for a single person.  The surviving spouse will report this income on the joint tax return he, or she, files for the year.

Estate income tax return:  The income earned by the decedent's estate between the date of death and the final settlement of the estate is subject to income taxes.  The tax return used to report the income and taxes due, if any, is Form 1041.  Generally a state with an income tax will have a state income tax return for the same purpose.

Estate Form 706:  Although the minimum amount of an estate requiring an estate tax return has risen substantially in recent years there are several reasons to file a return which may not be required.

The value of the assets of the estate may be subjective, such as real estate or a business.  The IRS may believe these assets are worth more than the executor's values.  This increase may mean that a return should have been filed.  The estate will have two problems at this point.  It will be arguing that the IRS values are too high at the same time it is trying to convince the IRS that the increased taxes are not correct.

The estate tax return sets a value for the assets.  The capital gain or loss from the subsequent sale of those assets will be determined using the estate's value as the basis.