It should come as no surprise that a divorce, like many major events in life, involves changes in taxes. We know that in the heat of the emotional turmoil that comes with ending a marriage, the IRS might be the last thing on your mind — but ignoring tax-related changes can be a costly mistake. Although every situation is unique, here are just five things to keep in mind when filing a return after a divorce:
- You are required to file your taxes according to your marital status at the end of the year — which means if you and your ex-spouse are still married on December 31st of the tax year, you may file married, filing jointly, or married, filing separately…but you may not file single. Whether to file jointly with your spouse or ex-spouse for any tax year where you were still married during the entire year is an important decision. Even if you earned no wages during the tax year, and only your spouse earned wages, if you file jointly with your spouse you could be responsible for any taxes, interest or penalties due on a joint return. If you decide to file jointly, you may, however, be able to receive relief from joint liability if you can claim innocent spouse relief , and the IRS approves of your request. Of course if a divorce judgment requires you to file jointly, then you may not have a choice. But if a divorce judgment is silent, then you have to decide.
- Who gets to claim the children of dependents? Who may claim the children as dependents depends on whether your divorce judgment addresses this issue, and if not, on the tax rules applicable to that tax year. Generally speaking, if the divorce judgment is silent, the person with whom dependent children lived for more than six months of the year (or more than one-half of the overnights during the year), usually is able to claim the children as dependents.
- Child support has little effect on taxes, since the parent who pays cannot deduct support payments, and the parent who receives does not need to claim support as income.
- Alimony can impact taxes, as often times the person paying the alimony may deduct it from their income on their tax return, and the person receiving it must claim it as income on their tax return.
- Houses are often one of the largest marital assets. The party retaining the house is generally the one who gets the deductions for items such as mortgage interest and property taxes, unless the divorce judgment provides differently.
Keep in mind that federal and state tax laws change from year to year. Your Florida divorce attorney can discuss with you some of the different tax implications of divorce. You should also obtain the advice of a tax attorney, CPA or accountant.
Attorney Andrea Jevic also contributed to this post.