Divorces, particularly those involving a large amount of assets and income, involve a boatload of nitty-gritty financial details. One of these aspects that divorcing couples should address during the proceedings is how they will handle certain facets of their taxes, including major deductions. Many couples remember to include larger deductions such as mortgage interest and dependents when negotiating the terms of divorce, but they forget to spell out how they will handle others such as those for charitable donations after divorce.
This winds up causing strife come tax time when neither party knows which itemized deductions they can claim.
How Should I Handle Charitable Donations After Divorce?
First, a word to the wise: as soon as you separate from your ex, begin making charitable donations in your name only. If you have any recurring automatic donations, amend them so that they are only in your name.
Likewise, if your charitable donations comprise tithes, inform your church that it should record those donations in your name only. In this way, you will receive all the credit for the contributions when you file your taxes — and you will have proof of it in case the IRS audits you.
How Do We Handle Deductions for Donations for the Year of the Divorce?
Financial advisory service provider Stout Risius Ross, Inc. explains, “for other itemized deductions, such as charitable contributions, you would generally be able to claim the expenses you paid individually and half the expenses that were paid from a joint account while you were married.” So, you should split any donations you made that year 50/50.
However, if you and your spouse did not lay out these details in your divorce decree, arguments can easily arise. For instance, one spouse may argue that because he made 70 percent of the income during the marriage, he should get to claim 70 percent of the deductions.
On the flipside, one spouse may argue that because her ex never attended church or cared about tithing, she should get to have the entire deduction. If you are having qualms about tax issues, we encourage you to seek help from a certified tax professional.
Where Can I Get Answers to Divorce-Related Financial Questions?
My firm is another excellent resource for answers. For financial questions related to divorce, my team of asset division attorneys at The Law Offices of Molly B. Kenny in Washington can help. We have the background, resources, and contacts to assist with even the most complex issues of divorce, and help you reach quick resolutions.
Contact me today at 425-460-0550 for a private consultation.