Reference no: EM133556127

Question

You have clients, John and Joan Smith, both 39 years old. Each year they bring you their income tax documents and you prepare their federal and state income tax returns. They always file Married - Filing Jointly because it is most beneficial. This year, they call to make an appointment to bring in their tax documents so that you can prepare their returns again. When they call they say to you "We were thinking of getting re-married. How will that affect our returns?" Come to find out, John and Joan divorced two years ago. They remained living in the same home together for the benefit of their young son, Jimmy (age 10). They never told you they divorced. So for the last two years, you have been preparing their returns as though they were married. John earns $75,000 per year, and Joan earns $25,000. They will be coming into your office next week. How will you advise them?