Divorce can completely change many aspects of your life, including how you file your taxes. All the changes can be confusing and you'll have to make some decisions that might feel hard to make because you're not sure whether you should do this or do that. Here are some tips that will help you navigate through the tax season as a newly divorced man.
Your martial status on the last day of the tax year should determine how you file your taxes. If you were married for most of the tax year and got legally divorced only in the last few months, you still are required to file as divorced.
If you were separated but still married on the last day of the tax year, you can file either a joint return or a separate return. You’ll get the lowest effective tax rate, the largest standard deduction available, and personal exemptions with a joint return. But you can’t claim a deduction for alimony on a joint return and you’re liable for mistakes that your spouse might make on her return. Talk with an attorney to see which option is the best for you.
One of you might be able to claim head of household to receive more tax savings. If you’ve lived apart for the last six months and you paid more than half of the costs to support the household that includes a dependent, you could claim head of household and your ex would file as a single taxpayer.
For separate returns in Florida, you can only take deductions for expenses that you paid for and were liable for. If you paid from a joint account, you can deduct only one-half of all expenses paid. If you paid for expenses that your ex was liable for, such as property tax on a house under her name, you can’t deduct it.
The same thing applies to charity donations. If you paid your donations with a joint account, you can only claim 50 percent of the donations.
If you change your name due to your divorce, report it to the Social Security Administration (SSA) by going to a local office or reporting it on their website. Do this before you file your tax return.
If you move to a new home, file Form 8822: Change of Address. Do this if you’re expecting the IRS to send you mail or a refund.
Child support payments are not taxed. Whether you pay child support or receive it, you don’t have to worry about adding this information to your taxes. It’s not deductible, either.
Alimony, on the other hand, is taxed. If you receive alimony, you must add it to your taxes as taxable income. Paying alimony? You can deduct it.
If you’re behind with your child support but not your alimony, don’t deduct your alimony payments. Your payments will be applied to child support.
Don’t add any assets you get in the divorce as income. In Florida, these assets are considered as gifts and are tax-free.
Legal fees for your divorce or separation aren’t deductible. They are considered as personal expenses.
Only one parent can claim a child as a dependent. Usually, the custodial parent claims the dependent minor child, but the noncustodial parent can claim the child instead with the proper forms. The IRS Form 8332 must be completed for the noncustodial parent to claim the child.
Divorced parents can take turns claiming a dependent child. If you are friendly with your ex, you can agree to both take advantage of the tax benefit of claiming a child. You could claim the child one year and your ex could do so the next year. Otherwise, the parent who has the higher adjusted gross income can claim the child as a dependent.
Keep a daily log of where your child stays if you have joint custody. This information can help you determine whether one of you qualify to claim head of household status or who should claim the child as a dependent. Also, keep a record of all household expenses.
If you have more than one child, the tax benefit is often split up between the parents.
Your income tax withholding might be affected by your divorce. As soon as your divorce is final, you should file a new Form W-4 with your employer to adjust your income tax withholding. This change might have an impact on your taxes.
Talk with an attorney about filing taxes after divorce. All the decisions and choices you’ll need to make when filing your taxes will affect your tax filing results. To make the best choices that will save you the most money, seek the advice of an attorney who is experienced with taxes after divorce. Every situation is different; get personalized and individual advice when you talk with one of the experts at Kenny Leigh & Associates.