A number of changes occur when going through a divorce, including how you file your taxes. Several questions may arise, and including the correct information on your tax forms is essential. Therefore, it is important to know how to manage your taxes as mistakes could prove costly if you do not have the right information.
Know the Status in Which You Are Filing
This step is essential. If you and your partner are legally divorced on the last day of the year—December 31—then you must file your taxes as single; or, you have the option to file as head of household. You can file this way if you and your ex-partner have agreed upon a legally binding separation.
However, if you and your spouse are still legally married on last day of the year, and are living together, then you have the option to file married filing jointly or to file married filing separately.
Additionally, it is beneficial to note that if you file head of household and married filing jointly, these options generally result in lower taxes than when you file single or married separate. Filing a joint return may save you money.
Child Custody Considerations
When children are involved in a divorce, it changes things. For instance, if parents have two or more children together, they then have the option to divide exemptions. Usually the parent who makes more money annually receives a larger tax break from claiming dependent exemptions.
For Those Employed, Consider Changing Your Withholding on Your W-4
You will fill this form out so that you can claim one additional exemption for a specific amount of deductions, which may include your alimony payments.
Alimony payments can be deducted on the payer’s taxes and are considered taxable earned income for the parent who receives them; however, these payments are not always fully deductible.
Speak with a Knowledgeable Attorney Today
Divorces can be stressful and overwhelming. However, they do not have to be. Therefore, if you are divorced or are in the process of divorce and would like further assistance with regard to your legal matters, do not hesitate to consult with a skilled DuPage County family law attorney. Contact Roscich & Martel Law Firm, LLC by calling (630) 793-6337 or by visiting our website to schedule a confidential consultation. Our attorneys are here to help.