Tax-related tips for the divorced

 Posted on February 01, 2022 in Divorce

With your marriage ending, you have many tasks to complete. Among them include figuring how to tackle taxes. All these years, the two of you filed jointly, but that will end once your divorce is final.

Now that things have changed, you want to make sure every tax-related matter gets properly set in place. It could mean whether you must pay more taxes this year or get that sought-after refund.

Filing status and dependents

Here are a few tax tips to consider and study when filing for divorce:

• Determine your filing status: If your divorce becomes final on or before Dec. 31, you may file either as a single taxpayer or head of household – if a dependent such as a child lives with you more than half the year and you pay more than half of your home’s upkeep. If your divorce is not final, then you likely have two options: filing taxes jointly with your estranged spouse or filing as a married person separately.
• Update your W-4 form: Every employee files this IRS document that tells your employer how much in earnings to withhold from a paycheck. As a divorced person, you must adjust your allowances, otherwise you may wind up overpaying taxes in the year or owe a larger-than-expected balance.
• Claiming children as dependents: In many cases, divorcing couples choose to alternate as to whom may claim the child as the dependent. One spouse may claim the child during even years, and the other spouse during the odd years.
• Alimony matters: Alimony paid to a former spouse can be deducted if the divorce was made final before the end of 2018.

Another thing to remember is that you are not able to deduct legal expenses stemming from the divorce. This list of expenses would include those related to litigation, tax advice and counseling received during the divorce.

Understand options and changes

A divorce likely brings you a new beginning in many facets of your life. This includes in tax-related matters. Make sure you understand the options available to you and the changes that you must make.