Divorce and Taxes

For anyone considering a legal separation or divorce—there is one more thing to consider moving forward: taxes. Not only do you have to worry about who gets what deductions; the array of issues you need to address is quite extensive.

Your Filing Status 

Your filing status is dependent on whether or not you were married on January 31^st. Even if you are not living together at the end of the year, you are considered married by the IRS for their purposes if there is no legal separation or divorce. That status impacts your standard deduction, filing requirements, and whether you are eligible for certain tax credits:

When to File as Single

• You file as single if your legal divorce or legal separation is documented;
• You may file as head of household if you remarry in the same year following your divorce.

If You’re Married at Year’s End 

There are several options for you if you are still legally married at the end of the year:

• You can file jointly as married, combining income and deducting allowable expenses. This often results in a lower tax burden.
• You may choose to file as married filing separately. In this case, each person files separate returns, listing only their individual income and deductions, as well taking advantage of any tax credits for which you are eligible.
• For those who are still married and/or legally separated, you can file as head of household if you meet three key criteria:

1. You lived separately from your spouse for at least the last six months of the year in question
2. You paid over half of home expenses for the year;
3. A dependent child lived in your home for more than half of the year.

When a Marriage is Annulled 

Amended returns must be filed for any tax years impacted by your annulment by whichever date is later:

• Within the statute of limitations of three years from the filing of the original return, or;
• Two years after paying the tax.

Support Payments 

• Child support payments are not deductible for the payer and must not be claimed as income by the recipient.
• For anyone divorced prior to 2019, alimony payments may be deducted by the payer and included as income for the recipient;
• For divorces occurring in or after 2019, payers may not deduct the payments, and recipients needn’t claim the money as income.

Claiming Dependent Children 

Usually the custodial parent claims dependent children on their taxes. When there is a joint custody agreement, the parents can choose how they want to handle the dependent claim. Some may choose to alternate every other year, while others with multiple children may have certain kids assigned to each parent. When parents can’t agree on how to handle this issue, the IRS has tie-breaker rules to make the determination for you.

 Advocating for You 

The experienced Springfield divorce attorneys at Courtney & Mills always help you to achieve the best possible outcomes in an annulment, legal separation or divorce. To discuss your questions, schedule a confidential consultation in our Springfield office today.

Source:

irs.gov/individuals/filing-taxes-after-divorce-or-separation