Getting divorced affects more than your day-to-day life; it affects your taxes, too. If you’re getting divorced or are recently divorced, here are some things to keep in mind when it comes to tax day.
Your Filing Status Will Change
If you got divorced before the conclusion of the year, then you’ll need to change your filing status to "single," even if you were married for the majority of the year. For example, if you were married throughout all of 2014 until November, you’ll need to file as "single" because your divorce was granted before 2014 ended. Your marital status on December 31 of each year determines your filing status. On the contrary, if you were married throughout 2014, even if you’re divorced now, you’ll still need to file as "married."
Changes to Exemptions for Your Children
If your child lives with you for the majority of the year, i.e., if you’re the sole custodial parent, then you can continue to claim your child as a dependent. However, if you are not the sole custodial parent, and your ex-spouse has not signed a waiver stating that he or she won’t claim your child as a dependent, then you cannot claim your child. A change to your ability to claim your child as a dependent can have a major effect on the taxes that you may owe the IRS.
Deductions for Alimony
While you are not allowed to deduct child support payments that you make, you may be able to deduct any alimony expenses that you pay to an ex-spouse. On the other hand, if you receive alimony payments, you must pay income taxes on them. You do not have to pay income tax on child support payments.
No Taxes on Assets Transferred During Divorce
An important thing to be aware of is that when getting a divorce, you do not have to pay taxes on the first time that assets are transferred (if assets are transferred/sold after an initial transfer, taxes do have to be paid). Also keep in mind that the amount of taxes that you have to pay on certain assets, such as your home, may change based on your tax filing status of "single."
Resources for Those Going Through Divorce
Going through a divorce is tough, and your life will be affected in more ways than one. To learn more about asset division, child support and alimony, as well as post-divorce resources, visit the blog of the Law Offices of Molly B. Kenny. If you have questions about the divorce process and how you can prepare yourself, contact us today at 425-460-0550.
