Taxes are often the last thing anyone wants to think about – especially during or after a divorce.
However, a divorce can have a significant impact on taxes, and divorcing spouses must understand those impacts. Tax season is drawing near, faster than many Virginians expect. So, here is a brief overview of the three most crucial things individuals must know when filing taxes after their divorce.
1. Filing statuses may change, or they might not
The first thing that everyone must do when filing their taxes is to specify their filing status. One’s filing status can make all the difference in the amount that individuals receive in their tax returns.
Upon divorcing, many spouses might think they can file taxes separately right away. That is not necessarily true. Generally, individuals can only file separately if their divorce was final as of December 31 of the tax-filing year. If not, they may still have to file jointly with their spouse.
Spouses can also only file as the head of the household if they:
- File separately;
- Paid more than half of the cost to maintain the household; and
- Have the right to claim their children as dependents.
2. Claiming dependents can be complex
Both spouses cannot claim children as dependents after the divorce. And who has the right to claim the children on their taxes can depend on:
- The custody arrangement or divorce agreement; and
- The family’s situation.
Parents will have to communicate about their strategy for claiming dependents after divorce to avoid tax consequences.
3. Remember the 2018 changes to spousal support deductions
It is also important to note that a 2017 federal law made considerable changes to how individuals could mark spousal support on their taxes. As of January 1, 2019, spouses cannot:
- Deduct spousal support payments if they pay support; and
- Count spousal support as income if they receive payments.
Spouses should keep this in mind, even if their divorce is not yet final.
Understanding these tax elements early – as well as filing taxes early – can help to reduce spouse’s stress as they navigate divorce. And so can the attorneys at Bowen Ten Long & Bal, PC. Our family law attorneys know how to guide individuals through every step of their divorce and prepare them for the future.