Divorce impacts many areas of your life, but one that’s often overlooked is your taxes. Divorce will change much more than your status as single or married on those tax documents.
Learn what you can and cannot claim as exemptions when you are divorced, plus get other tips on filing:
Filing Single Vs. Married Filing Separately
According to efile.com, if the divorce is not yet finalized by December 31, you and your spouse should plan to file taxes as “married filing separately.” With this designation, each of you is responsible for your own debts and income earned.
If you are concerned your spouse isn’t honest with you about his or her income, or if your spouse has a lot of medical or student loan debts, this status protects your interests.
If the divorce is finalized by year’s end, you can go ahead and file separately.
Child Support/Child Custody
Child support is not deductible on taxes. It may seem unfair, since you’re being taxed on your full income while sending a share of it to your ex for child support. If you try to write off child support as anything like “family support,” however, you can get caught.
Only you or your ex can claim your child as a dependent on your tax return. Most of the time, the parent with custody takes this exemption. If you and your ex are on civil terms, you may come to an agreement about who takes it.
Spousal Support
The IRS points out that spousal support or alimony payments are tax deductible when they are court-ordered. If you pay alimony, you can deduct this on your taxes; if you receive alimony, you must claim this as earned income. If you voluntarily pay money to your spouse without a court agreement, you cannot claim this.
Tax Deductions For Legal Help
Sad to say, most of the legal fees you spent on separating from your ex are not tax deductible. However, you can deduct a portion of legal fees related specifically to alimony collection or to divorce-specific tax advice, such as the tax ramifications of spousal property distribution.
If you have questions about your taxes after divorce, it can be beneficial to check in with your divorce attorney or ask a tax preparer. It’s far better to be safe when it comes to doing your tax return than risk getting an audit.