Taxes are a difficult enough problem to deal with at the best of times. But if you’re going through a divorce, everything gets more complex with added emotions on top of it.
As an experienced divorce attorney in Columbus, Mary Lewis Turner has seen every aspect of divorce cases, including the way it affects the taxes of the divorcing parties. This is something that many people aren’t thinking of during their divorce case, but staying on top of it is important because it can be surprising how taxes and filing status change during the process.
So to keep you informed, here are some of the most important things to remember about how to navigate taxes during a divorce.
If Your Divorce is Not Finalized, You Still File As Married
It may be awkward, but even if you are deep into the process of divorce with your partner and your Columbus divorce lawyers, if your divorce isn’t signed off and completely finalized by December 31st, then as far as the IRS is concerned, you’re still married and you need to file as such.
At this point, you have the option of filing a joint tax return with your spouse, but you can also file as married filing separately. If filing separately, however, you still need to coordinate with your spouse on things like who is claiming the children as dependents and other things that only one of the two of you can claim on your taxes.
On the other hand, if your divorce IS final by the end of the year, you are considered unmarried for the entire year for tax purposes, even if the divorce was finalized on December 30th.
Claiming Children As Dependants During A Divorce
If you and your spouse are filing your taxes separately, it should come as no surprise that you cannot both claim your children as dependents – it has to be one or the other, they cannot be claimed twice.
This is a problem that is often solved easily by couples and their divorce attorneys in Ohio – if you have an even number of children, then you can divide them evenly with each parent claiming the same number of children and thus getting the same benefit. There is no problem with this solution and it has no bearing on custody or other concerns.
However, what if you only have one child or an odd number of children? Then one parent is naturally going to be able to claim an additional dependent, and that often means negotiation.
If you’re having difficulty coming to agreements on these things, your divorce attorney at Lewis Legal Solutions can help find agreeable terms, or you can rely on the IRS’s “tiebreaker” rules, which state that separated parents can claim a child as a dependant if the child lived with that parent for longer during the year.
Another common option is for the parents to alternate claiming the child every other year so that both parties receive a benefit.
Can You Claim Spousal Support or Child Support on Taxes?
If you are paying child support, your Columbus divorce attorney should inform you that these payments are not tax-deductible.
The IRS considers child support payments personal expenses as they are for the benefit of your children. In the same way that the money you spend on feeding and caring for your children yourself is not tax-deductible, neither are your child support payments. Likewise, the recipient of child support does not have to claim their child support as taxable income.
Spousal support is a bit more complicated. Prior to 2019, it was possible to take an above-the-line deduction on spousal support payments (also referred to as alimony payments) to an ex-partner, with the tax burden being left to the recipient of the payment.
However, for divorces decreed January 1, 2019 or later, that is no longer the case, and spousal support payments are no longer tax-deductible by the person who pays spousal support. Likewise, the recipient of the spousal support payments does not have to claim their spousal support as taxable income.
More Questions? Contact Lewis Legal Solutions.
This is only scratching the surface on the kinds of tax questions you might run into during a divorce.
Everyone comes into a divorce with different circumstances, and tax questions can get tricky with things like property transfers, debts and back taxes, and property tax liability.
Trying to cover all of that at once is difficult because your individual circumstances can change the outcome greatly. So instead, contact Lewis Legal Solutions for a consultation and get your questions answered in a way that helps you in your own tax situation today.