Many of those who have recently filed for divorce are uncertain of how their divorce filing will affect their tax return. With tax season rapidly approaching, it's important to resolve any tax issues resulting from a divorce filing to maximize your tax return and ensure that issues with the IRS are avoided. The following are four factors your need to take into consideration as you prepare your tax return for the upcoming season after you've begun divorce procedures with a family law attorney:
Filing singly or jointly
One of the first pieces of information you enter as you fill out your tax return is whether you are filing singly or jointly.
Your filing status is largely determined by what your marriage status is at the end of the tax year. If you are still legally married at the end of the year, then you are legally required to file either "married filing singly" or "married filing jointly". However, if you are already divorced as of the end of the tax year, you should file singly.
You'll get a larger tax return if you can claim dependents (children) who you have been supporting financially throughout the tax year. If you're divorcing, it's possible to divide the dependent exemption if you only have one child. Alternatively, you can split dependents equally if you have an even number of children.
Your spouse may contest your rights to claim a dependent if he or she feels the right to claim responsibility for all or for the majority of the financial burden of supporting the dependent. In this case, you should ask the advice of a family law attorney, such as those at Ivy Law Group PLLC, if you want to claim the dependent exemption.
Your alimony payments are tax deductible if you are making them to your ex-spouse. At the same time, you have to pay taxes on alimony if you are receiving it from your ex-spouse. Alimony payments should therefore be factored into the tax returns of both spouses.
Dividing the return money
If you are filing jointly, you will receive one return that must either be divided up between spouses or given entirely to one spouse. You'll have to come to an agreement with your spouse regarding the use of the return money if you are filing jointly.
If there is any contention regarding the allocation of the return money, it's probably best to file as "married filing singly" if you are still legally married at the end of the tax year.
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