Tax season and divorce are two extremely trying periods to endure. Combine tax season with divorce, and you have a recipe for stress. You must consider a few things when you file taxes during or after a divorce.
One thing is clear: things will change. But an understanding of how taxes affect divorce is the first step towards your new life.
Determining Your Filing Status
The first thing you must do when filing taxes during a divorce is determine your filing status.
Couples who are breaking up but not yet legally divorced before the end of the year have the option of filing a joint return or married filing separately. This means if you are not legally separated on Dec. 31, you must file jointly or married filing separately.
In 2022, the standard deduction for married couples filing jointly is $25,900. For single taxpayers and married individuals filing separately, the tax deduction is $12,950. Finally, the standard deduction is $19,400 for heads of households.
You can file as Head of Household, even if you weren’t legally separated or divorced by Dec. 31.
There are tax benefits to filing as Head of Household, but you need to meet the following requirements:
- File a separate tax return from your ex-spouse
- Pay more than half the cost of maintaining your house for the tax year
- Live more than half the year with a “qualifying person,” often a dependent child
Filing Taxes After Divorce
In the year of your final divorce decree, you lose the option to file as a married joint or married separate.
Deciding Who Claims Dependent Children
After a divorce, the person who can claim a child as a dependent is the custodial parent. The custodial parent is often listed in the divorce agreement and is the parent who has the child more nights of the year.
Reporting Child Support and Alimony
You cannot deduct the alimony you pay for divorces finalized after Dec. 31, 2018. If you receive alimony you do not need to include payments in your taxable income.
Child support is not tax-deductible or considered part of the income.
Deducting Legal Fees
If you are getting a divorce, you may be wondering if you can deduct your legal fees. Unfortunately, you cannot generally deduct legal expenses from filing a divorce.
Consult a Legal Professional
Questions about filing taxes before and after divorce are complex. The best thing to do is consult a legal professional.
For more information about filing taxes before and after a divorce, contact Batley Family Law. We would be happy to help explain the different benefits of each tax status to create a comprehensive plan for your taxes during and after a divorce.