The Law Offices of Matthew W. Stanley
The divorce process can be stressful emotionally and financially. It can also impact your taxes in several ways. Knowing what to expect can help you plan for tax issues that arise as a result of your divorce.
Changes to Your Filing Status
Under IRS rules, your status changes to unmarried the year of your divorce regardless of where you divorce falls during the year. For example, if your final divorce decree is issued on November 10 , you are considered unmarried all the way back to January 1 . (The same is true even if your divorce is final on December 31 .) This also makes you head of household for tax purposes.
On the other hand, the law still considers you married if your divorce is not final by the end of the year. If your divorce is still pending (or was pending on December 31 ) you and your spouse can file a joint return, "head of household" (if you and your spouse have lived apart for at least six months), or "married filing separate."
Changes to Claiming Dependents
Custodial parents are permitted to claim the children on their tax returns. If your children live with you for more than half of the year, you are the custodial parent for tax purposes. In some cases, however, the divorce agreement allows one parent to claim the children in certain years or arranges for the parents to rotate years for claiming the children as dependents. If you are the non-custodial parent with an agreement that allows you to claim your children as dependents on your taxes, you must receive IRS Form 8332 from the custodial parent even if your divorce agreement states that you are allowed to claim the children.
Child Support and Spousal Support
Child support and spousal support are treated differently for tax purposes. That is, child support is not considered taxable income; nor is it considered a tax deduction. By contrast, spousal support is considered taxable income for the spousal support recipient and a tax deduction for the spouse who pays spousal support.
Tacoma, Washington Tax Lawyer
This website has been prepared by the Law Offices of Matthew W. Stanley for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.