If you have recently gotten divorced or are currently involved in the process, one thing you need to think about is how you’re going to file your taxes. This is something that no one enjoys, and filing is made more complicated if you divorced during the past year.
You may want to engage a certified public accountant (CPA) to help you through this process, but in the meantime, here are some basic facts that you should know about filing taxes as a recently divorced person.
To file as a married person, you need to have been married for the entire year. If your divorce took place at any time during the year in question, you would file as a single person (assuming you haven’t already gotten married again). The exception to this is that you can file as head of household if you are a custodial parent.
In your divorce decree, a judge will decide who gets to claim what child. If you only have one child, it may rotate every year. It is important that you follow the decree precisely to ensure that you do not get into trouble with the IRS in the event that both you and your ex claim the children on your taxes.
If you pay child support, this is not tax-deductible—but alimony is. Likewise, if your support was deemed family support, the entire amount is tax deductible. Conversely, if you are receiving child support, you do not have to claim it as income, but you do have to claim alimony as income. You would also need to claim the entire amount of family support as income so that there is an actual tax strategy involved when completing your divorce.
A judge may give you the ability to claim a child for the purpose of a tax exemption or credit, even if they live with you less than six months out of the year. To protect yourself, you should have your ex sign form 8832 to ensure that he or she does not also try to claim the child and create a red flag with the IRS.
If you or your spouse were providing in-home care for your children during the marriage but are now both working, your kids may now be in daycare. In this case, there is a child care credit you may be eligible for. Just keep in mind that only the custodial parent can claim this credit.
Something else to consider is that you may want to change your deductions on your W-4 form. When you are no longer married, you will have fewer deductions, and it is important to ensure that enough taxes are being withheld from your weekly or monthly paychecks. Otherwise, you could end up with a large tax bill at the end of the year.
Even if you typically file taxes on your own, it is wise to engage an accountant or CPA to guide you through the process the first year after your divorce. Once your taxes have been filed under your new status and you understand the exemptions and credits you qualify for, it will be easier to file on your own.
It is also within your best interests to call 909-466-7661 or complete the form below to speak with the Law Office of Laurence J. Brock. We understand tax implications and how to protect your rights by ensuring that all necessary tax issues are addressed in the final divorce decree. Otherwise, ambiguity could lead to both future complications and disputes between you and your ex.