Filing your taxes is already a tedious and timely process. With a finalized divorce the last thing you want to do is file incorrectly and have to deal with the IRS or amending a tax return due to lack of familiarizing yourself with the post divorce tax filing procedures.
Here are some things to keep in mind when filing your taxes after a divorce.
Claiming a child/children: In order to claim a child, an IRS Form 8332, eloquently titled “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent,” must be filed.
• If you are the non-custodial parent then the custodial parent must sign the form.
• The tax implications are significant: for each dependent, you can deduct $3,900 from your federal taxable income, which is likely to reduce your taxes.
• Each qualifying child must live with you more than half of the year and be under the age of 19 at year-end. This exemption also applies if your child is under 24 and a full-time student for the year – defined as attending school for at least part of five calendar months during the year.
Know Your Filing Status: Your marital status at the end of the year determines how you file your tax return.
Alimony: Alimony is taxable to the recipient. In other words, the person who pays alimony gets to deduct it from their taxes.
Child Support: It is neither taxable to the recipient nor to the person paying
Division of Assets:
• Property: For any marital assets such as property, it is crucial to look into the capital gains and losses you and your ex-spouse may have to report on your tax returns if there is property transfer or you plan on selling the home and share the money from the sale
• Head of Household: To claim your home, you must qualify as a head of household which includes paying more than half the cost of maintaining the home and it must be the primary home of the qualifying child or someone claiming you as a dependent.
Deducting the Cost of Divorce Tax Advice: You can’t deduct all fees charged by your divorce lawyer, but you may be able to deduct the cost of tax advice given to you by your lawyer when preparing for the divorce.
If you have questions about filing your taxes after divorce, contact Thorsteinson Law Group , your trusted and experienced Los Angeles and Orange County Divorce and Family Law Attorney.