How Does a Divorce Affect Your Tax Filing?
By Taxation Solutions, Inc. on 2016-05-04
Your filing status for a given tax year is determined based on the last day of that year. So, if you were married most of the year but your divorce was finalized in December, you'll be filing separately. However, if you're still officially married as of December 31—even if divorce proceedings are ongoing—the IRS requires your tax return to reflect your married status.
The tax ramifications of a divorce go far beyond your filing status. For instance, alimony payments are deductible by the payer and taxable by the receiver if the two of you file taxes separately. When it comes to children, in most cases the custodial parent is the one who is allowed to claim the children as dependents for tax purposes—but there are exceptions. And what happens when a current or former spouse's financial wrongdoing affects the other partner's tax return? That's where a settlement known as innocent spouse relief comes in.
If this all sounds confusing and overwhelming, you can breathe easy knowing that help is on the way. In and around Charlotte, Taxation Solutions, Inc. is standing by to guide you through all of the complicated tax ramifications of divorce. We'll assist you with your new filing status, help you claim the right credits and exemptions, and generally ease your burden during this difficult time. Get in touch today to learn more!