April 15 is Tax Day. This is not typically a joyous occasion for Americans, especially for couples getting divorced. Divorcing couples should be aware of the tax implications so they can prepare for life after the divorce has been finalized.
If you are getting divorced, it is important to know what may affect your tax return and what to consider before filing your taxes.
What should you know before filing your taxes? First of all, it is important to know your tax filing status. This all depends on if you were officially divorced by December 31. If you were, you can file as single or head of household, depending on if you qualify. If your divorce was not finalized by the end of the year, you will have to file as single or married.
Alimony is another issue you have to consider. If you pay alimony, you can deduct it on your tax return. If you receive alimony, you must report it as taxable income.
Children also play a big role on your tax return. Only one parent can claim children as dependents on their tax return. Some divorced parents come to an agreement to claim children as dependents every other year, that way both parents are able to benefit from claiming dependents.
Understanding the tax implications of your divorce can help you properly plan for your future, especially when it comes to your finances. Working with a skilled divorce attorney can also help you navigate through the complex nature of divorce and filing your taxes.
Source: Nerd Wallet, "Managing Your Taxes During and After Divorce," Spencer Tierney, April 14, 2015