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Three key things to know about filing your taxes post-divorce

On Behalf of | Apr 25, 2018 | Tax Law |

Going through the divorce process can be an overwhelming, emotionally exhausting experience. When it’s over, the resulting implications on your taxes can be complicated.

We’re here to help guide you through the tax process following a divorce. In this article we present three important things to understand about how divorce affects your taxes:

Dependency exemption

If you and your ex-spouse have a child together, and that child lives with you for at least half of the year, then you can claim this exemption on your tax return—which works out to be about $3,800. In order to qualify, your child must be:

  • 18 or younger
  • 23 or younger and a full-time student
  • Any age and permanently and completely disabled

Note that only one parent in a divorce couple may claim this exemption, so it’s important to clarify with your ex which of you is eligible. If both of you claim this exemption, it could raise a red flag with the IRS.

Filing status

Most people mistakenly assume that once they’re divorced, they should file as single. However, if you have a dependent who lives with you more than half the year, and you pay for more than half of your household expenses, you can actually file as Head of Household—which will typically earn you a bigger tax benefit.

Alimony deduction

Through the end of 2018, alimony for divorce settlements may be deducted on tax returns. (Beginning in 2019, the Tax Cuts and Jobs Act kicks in, and alimony will no longer be deductible.) A word of caution: when you claim alimony as a deduction, you will need to include your ex-spouse’s Social Security Number. The IRS can easily compare the amount you reported as a deduction with the amount your spouse reported as payment, and if these numbers don’t match, it could put you at risk for a tax audit.

Myriad factors can affect your bottom line and earn you a bigger tax break. Consulting with an experienced tax attorney is a good step to ensuring you get all of the tax benefits you deserve.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.