Filing Taxes After a Divorce
Divorce creates a lot of confusion on a number of fronts. One of the fronts that seem to create the most confusion is taxes. What, precisely, are you allowed to write off when it comes to your taxes? What is considered your taxable income?
For some, the question is even simpler. How do I file taxes
How to File Taxes After Divorce During the YearThere are going to be some major changes to your tax status once you’re filing separately. The major areas that divorce impacts are the following:
Your filing status
Your exemptions for dependents
Alimony and child support payments
To be sure, it is important to understand what an average post-divorce filing will look like and some of the ways your taxes will be impacted depending on certain variables.
Your Filing StatusMarried couples typically file jointly. Once the divorce has been finalized, they will need to begin filing separate tax returns. This means that both spouses will need to file as either ‘single’ or ‘head of household.’ Separated couples may also claim these statuses provided they have lived separately for at least six months. While there are more benefits to filing as ‘head of household’, there are also qualification requirements. Those include:
If you’re divorced as of December 31st of the year you’re filing. To put it another way, if you’re not divorced by the end of the year in which you are filing, you still must file as married.
You absorbed at least half the costs of keeping up your home. This can disqualify some who are receiving child support or alimony. Both ex-spouses cannot file as heads of household claiming the same dependants.
You must have a qualifying person as a dependent. You will need to either have a child or some other dependent who either lives with you or that you support financially.
Those who have residential custody of the children are the only ones who can claim the children as dependents. In cases where the parents have joint custody and the children split time evenly among the parents, the parent with the higher income can claim them as dependents and thus use them for the purpose of filing as ‘head of household’. The other parent will not be able to claim those children for the purpose of filing as head of household.
Child Support and AlimonyChild support payments are not deductible. Alimony payments, on the other hand, are. Alimony is considered ‘earned income’ for those who receive it. Hence, it’s taxed via income tax. Some spouses attempt to hide child support in the form alimony. The IRS does not like this. Any alimony that looks like it’s being used for child support will be taxed.