As if tax season doesn’t bring enough stress, adding in a divorce on top of that can be debilitating. In the midst of determining property division and custody agreements, you’ll have to also work out what you owe Uncle Sam.
According to the IRS, if your divorce isn’t final as of December 31, you’re still considered to be legally married by the tax code. According to a Boston divorce attorney, “… the average time to conclude an entire contested case is approximately 10 to 12 months.” Due to this, you will still need to file a joint return unless you’ve been deemed legally separated by the court. Here are three questions to ask before filing your taxes during your divorce:
Who Gets to Claim the Kids?
If you’re claiming head of household, the more dependents, the better. There are many costs that come with providing for children and these costs can help increase certain tax deductions including medical and educational expenses. If you have two children, it’s okay to claim one while your spouse claims the other. If you only have one child or an odd number of children, the right to claim will go to whoever the child lived with the most during the year. Make sure who claims who is crystal clear, because any false or incorrect information can result in an audit by the IRS.
Can I Deduct Costs Associated With the Divorce?
Lawyers, court dates and mediation can be both timely and costly. Unfortunately, fees and court costs associated with getting a divorce are not eligible to be deducted. In the past, certain parts of getting divorced could count as a miscellaneous itemized deduction but have been eliminated in recent years.
Can I Deduct Child Support?
Child support is considered a personal expense, so unfortunately no. The court views child support as something you would have paid if you had remained married and the family unit was intact. You would not be able to claim any of these personal expenses such as clothing, food and shelter in either situation. Child support is for the benefit of the child/children and cannot be claimed as income on either side. According to the government, child support is tax-neutral.
Divorce is not only taxing emotionally, but financially as well. It’s important to take every step possible to ensure a smooth transition, especially during tax season.
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