It can be difficult to determine how to file your taxes during and after a divorce. Depending on your filing status, there are differences that can significantly impact the amount of tax you owe or the amount you are refunded.
The following is a list of issues to be aware of when filing your taxes:
What is my filing status?
If you are still legally married as of December 31, you have to file your taxes either “married filing jointly” or “married filing separately.” Discuss with your CPA the benefits and disadvantages of both, as “married filing separately” can generally reduce tax benefits.
Who will claim the children as dependents?
Divorced couples can choose to divide the dependent exemptions for their children. There may be other allowable deductions for expenses you pay for your children, such as medical expenses or childcare.
Do you pay maintenance, or do you receive maintenance?
Maintenance (sometimes called alimony) is deductible by the person paying it. However, maintenance is considered taxable income to the person receiving it. Child support, on the other hand, is neither deductible nor is it considered taxable income. Recent changes to the tax code that went into effect January 1, 2019 have dramatically changed the tax landscape in regard to these matters, so you will want to be pay particular attention to these issues this year.
Should the refund be divided?
If you are in the middle of the divorce and are filing jointly, you need to reach an agreement with your spouse on how the refund should be divided between the two of you.
Taxes can be complicated even when you’re not dealing with the added layer of divorce. This is why it is essential to consult with a CPA on all of your options before filing.
Attorney Sophya Qureshi Raza practices family law where she effectively guides clients through dissolution of marriage, modifications of prior judgments, and resolving child custody and paternity disputes. She also helps families with legal guardianships and conservatorships for the elderly and disabled. For questions, or to schedule a consultation, call Raza & Jones LLC at 314-449-8830