The tax season just ended for most of us and we are happy to leave those
monetary troubles and frustrations behind for another year. But there
is no such thing as planning ahead too soon, especially if you are going
through a divorce right now. How and when your divorce actually finalizes
could have a big impact on your tax returns and similar obligations to the IRS.
The IRS (Internal Revenue Service, if you ever wondered the full name)
considers unyou married for an entire tax year so long as you were unmarried
for a single day that year. Imagine that your divorce finalized on December 30th, 2015; if that was the case, you would file as unmarried for the whole
year, despite only being divorced for a day in the eyes of the divorce court.
As a divorced tax filer, you can select Single or Head of Household on
your filing. Single does not give you too many tax benefits so it pays
to take some time to see if you can file as the Head of Household. Being
able to file as one generally gives you tax breaks greater than if you
were Single but slightly less beneficial than if you were married.
You may file as Head of Household if:
You were divorced by December 31st of that tax year.
- You paid 51% or more of the costs to maintain your household while married.
- Your spouse lived with you for at least half of that tax year.
Are Your Children Your Dependents?
Only one parent in a divorce has the right to claim their children as dependents
and earn important deductions. The parent who has been granted full or
primary custody of a child is granted the right to claim that child as
a dependent. For most divorced couples, this make sense to them but for
some, it is not beneficial. If you are a custodial parent but do not want
to claim your children as dependents, perhaps to give your ex-spouse some
help with their taxes as a sign of good will, you can both use an IRS
Form 8332 to transfer dependence.
Property deductions are entirely based on how your assets were divided
during your divorce. This can make
property division a major point of
contention between spouses once they realize that they stand to save or lose significantly,
depending on what they do or do not own during the upcoming tax season.
If you need help with your divorce and understanding how it will affect
contact The Moodie Law Firm and our Denver family law attorney today.