Tax Concerns in a Divorce
Divorce is never an easy time and there are many issues that must be resolved throughout the process. And the issues don’t necessarily stop at the end of the divorce. To be sure, once the dissolution of marriage is finalized, both parties file taxes separately. There are several areas of concern that are best ironed out during the divorce settlement. Some of these include:
- Dependency deductions for children;
- Taxes on child support;
- Alimony taxes; and
- Property transfers.
Filing taxes will be different when you are divorced than when you were married. If you were recently divorced it is best not to wait until the last minute to file in order to ensure that you can comfortably reach the tax deadline.
Once you are divorced you are no longer legally able to file taxes as married. Your tax filing status in Florida is based on your legal marital status on the last day of the year. Therefore, even those who were married for 11 months but divorced in December are not allowed to file as married. Instead, you must file taxes as either single or head of household. In some cases it may be advantageous to remain married for the entire year and divorce in the beginning of the next year. This allows you to file as married status. It is important to note that you are not legally divorced until the court makes a dissolution decree.
The most common question facing newly divorced couples is who can take which deductions. Certainly deductions can be complicated and for this reason if you have any questions you should speak with your account or CPA before either of you complete your taxes. Remember that only one parent can deduct any minor children as dependents. Generally speaking, any assets that you obtained in the divorce are not taxable. There are many matters that arise regarding child support and child care costs that should be resolved prior to filing taxes.
Tax Tips For after a Divorce
First, you will need to review and change your W-4 with your employer. Do this as soon as possible so the necessary changes will take effect quickly. If you have moved, you will need to file a change of address with the IRS. You can do this by submitting a Form 8822. You will also need to make any name changes to the Social Security Administration. This should be done prior to filling out and filing your taxes for the year. Alimony received must be reported as income and those paying alimony may take it as a deduction. Tax situations may vary greatly and each situation is unique. For these reasons it is best to discuss your concerns with a tax specialist or CPA before you complete your taxes. Making changes to your taxes after they are filed can be complex so it is in your best interest to get your questions answered prior to filing.
Divorce can bring many complex situations, including those regarding taxes. When you are seeking a divorce or have concerns regarding the terms of your divorce, contact the Tampa divorce and family lawyers at All Family Law Group, P.A. in Tampa Bay at 813-816-2232 for a consultation at no charge or email us.
By Lynette Silon-Laguna Google+