Is it legal to get a divorce for tax purposes?
MFS drops them into the single tax brackets and limits the types of credits they can take.
What his wife is seeing is that as two single people, he can claim Head of Household and the child, and itemize all the deductions to minimize his tax liability, and then she files single with standard deductions. It would usually be better tax wise to have the higher earner claim the itemized deductions and child exclusions in the HOH brackets, but they may have some specifics (Retirement contributions, EIC earnings, etc). There are also a host of tax changes in 2013 and 2014 that are not beneficial to married couples – check out this article on Forbes for some points.
Tax Issues Caused by Getting Divorce
While not strictly illegal, there are issues that can be caused by this.
1) Divorce and remarriage. If you obtain a divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse must file as married individuals in both years.
2) Head of Household. You must have paid more than half the cost of keeping up a home for the year, and have a qualifying dependent. This is why the higher earner usually claims the child and HOH status.
3) Qualifying Dependent. You must have paid more than half the living expenses for your qualifying dependent. This is why the higher earner usually claims the child and HOH status.
4) Benefits. As you said originally, you had to get legally married to get onto her benefit plan. This would still be an issue.
5) Asset transfers. If one of you were to pass while not married, any assets transfered to the remaining person would be subject to probate and estate taxes. Also, any disaproving family members may file claims in probate to capture the assets since they would have a better claim than your ex-spouse.