Soon after the excitement of Mardi Gras is over, Louisiana residents will be facing tax season. Many life changes impact our taxes — getting married, buying a home, having a child and, of course, divorce.
If this your first year filing your taxes since your separation or divorce, there are some important factors that you need to consider. The last thing that you need after a marital break-up is to have to deal with the Internal Revenue Service.
If you always relied on your spouse to handle the taxes, it’s wise to go to a tax professional. Even if you’ve been the one doing the taxes and consider yourself an adept do-it-yourselfer, during this transitional time, it may be worthwhile to let a professional help you this year.
Here are some of the key tax issues you’ll face after a divorce:
— Filing Status: This will depend on when your divorce became final (or if it has). If it was not finalized by the end of last year, you need to file as married filing separately or married filing jointly. If it became final any time last year, you need to file as single or head of household, depending on the situation.
— Alimony: If you’re the one paying alimony, it’s tax deductible. If you’re receiving it, you need to include it under income because it is taxable. Note that child support payments are neither deductible for the person paying or considered taxable income for the recipient.
— Child Dependents: Only one parent can claim a child as a tax exemption. Usually it’s the parent with primary custody. However, in some cases a couple will agree during the divorce for the non-custodial parents to claim this exemption in order to help them financially.
Many couples consult a tax or financial advisor during the divorce proceedings to help prevent confusion and unwanted tax issues later. Even though the two of you have gone your separate ways, you may be joined in some way during tax season, at least for awhile.
Source: Huffington Post, “Common Tax Issues for the Recently Divorced or Separated,” Joseph E. Cordell, Feb. 04, 2016