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Family Law

Filing Taxes After Divorce

By July 15, 2022February 27th, 2024No Comments

Filing Seperate Tax Returns in Idaho

 

If you’re one of the many people who went through a divorce last year, you’ll now be dealing with a different tax situation as a result.  You might be in a position of having to file taxes on your own for the first time, or for the first time in a long time. From choosing the right tax filing status to determining which parent can claim the child and dependent care credit, there are many factors that need to be considered.

Here are 8 things you should know about filing your seperate tax returns after a Divorce:

 

  1. Your marital status at the end of the year determines how you file your tax return.  If you were divorced by midnight on December 31st of the tax year, you will file separately from your former spouse.1
  2. If you’re the custodial parent for your child(ren), you may qualify for the Head of Household status.  A custodial parent is the parent that lives with and cares for their minor child(ren) for all or most of the time.  A noncustodial parent might have the child(ren) on a limited basis or only have visitation rights.  If you’re the custodial parent, you can claim Head of Household if you have a qualifying dependent and provide more than half of their support.  The standard deduction for Head of Household is $18,800 vs $12,550 for single filing status for the 2021 tax year. Know this amount changes each year.  If you’re not the custodial parent, you must file with the single filing status
  3. You must consider the tax implications of child support.  Child support isn’t tax deductible to the person who pays it.  Child support also doesn’t get reported as taxable income to the spouse that receives the child support payments.
  4. The custodial parent can usually claim the earned income tax credit and the child and dependent care credit on their taxes.2 You’ll need to review your divorce decree to see who gets to claim the child(ren) as dependents.  If your divorce decree doesn’t specify who claims the child(ren) as dependents, then the custodial parent gets to claim them. The custodial parent can also release the right to claim the child as a dependent to the noncustodial parents by filling out Form 8332: Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.3 If you have joint custody, the parent who has the child the greatest number of days during the tax year gets to claim the child(ren). If the custody is joint 50/50 and the support amount is the same, then the individual with the higher income gets to claim the child.  Other divorce decrees alternate the years each parent can claim the deduction.  For example, one spouse gets to claim the child(ren) on even years, while the other spouse gets to claim them on odd years.
  5. If you’re having issues with your ex and you’re entitled to claim your child(ren) on your tax return, it’s usually best to be the first to file your taxes.  If you’ve already filed your returns, the IRS will make the person who filed later prove that they were entitled to claim them.  When preparing tax returns, there are many times an ex has claimed the dependents when they weren’t supposed to.  This leaves it up to the other spouse to prove their rights to claiming the child(ren).
  6. If you’re eligible, you’ll want to claim the Child and Dependent Care Credit.  Previously, the Child and Dependent Care credit wasn’t refundable.  For the 2021 tax year, the credit is refundable if you lived in the United States for more than half of the year.  This means that even if you don’t owe taxes, you could still get this credit as a refund.
  7. If you’re employed, you’ll want to make sure you change your W-4 to reflect the correct number of dependents for your individual situation.
  8. The Tax Cuts and Jobs Act (TCJA) of 2017 changed how alimony is taxed. This change applies to new divorce agreements after December 31, 2018. If your divorce was finalized before December 31, 2018, alimony payments were tax deductible by the person making the payments, and person receiving the alimony had to claim it as income on the tax return.4 Alimony payments dated January 1, 2019, or later are not tax deductible by the person paying the alimony. The person receiving the alimony does not have to report the alimony payments as income.  You also can’t deduct alimony payments if your divorce was finalized before 2019 but later modified if the modification expressly states the repeal of the deduction for alimony payments applies to the modification.

 

 

Let Gordon, Delic & Associates Help You File Your Separate Taxes

 

These are some very basic tips for filing tax returns after a divorce, but in many situations it’s a good idea to hire a professional to help you navigate through all of the tax laws. At Gordon Delic & Associates, we are very familiar with all the legal requirements set out by the IRS. Our professionals can ensure that you’re well represented in your divorce, and that your taxes are done correctly to ensure you receive the largest refund possible. The attorneys at Gordon, Delic & Associates can represent you in your case to make sure the 8332 is signed in line with your divorce decree.