Filing Statuses When You Dont File Jointly
If you and your spouse cannot agree to file a joint return, you will have to file either as married filing separately, head of household, or single. If you are able to file as head of household, you will be allowed to claim the higher standard deduction for that status as well as to claim certain credits such as the earned income credit and the dependent care credit. People who are able to file as head of household may pay lower taxes. In order to file under this status, you must meet the following criteria:
- You must have paid more than 50% of your housing costs during the tax year, including your mortgage or rent, taxes, utilities, insurance, and food
- Your spouse must not have lived with you in your home during the final six months of the year
- Your child, eligible foster child, or stepchild must have lived in your home for more than 50% of the year and
- You must be allowed to claim your child as your dependent.
If you file your tax return as a head of household, your spouse will have to file his or her return as married filing separately. As long as you continue to meet the requirements, you can continue filing your tax returns as head of household in your subsequent tax years after your divorce is final.
Income Tax Filing Status Options
Single
- Not married during the year.
- Have obtained a divorce, separate maintenance agreement , or annulment by the last day of the year .
You are legally married on the last day of the year .
In most cases , filing a joint federal tax return will save on income taxes. There are some credits and deductions that are not available with the filing status such as American opportunity credit, lifetime learning credit, tuition and fees deduction, student loan interest deduction, and the earned income credit.
If there is an error on jointly filed returns, both spouses are equally liable for the tax due. If you think your spouse is not reporting all of his income on his income tax return or is claiming bogus deductions, you may want to consider filing a return.
You are legally married on the last day of the year .
One advantage of is that you do not need to communicate as much with your spouse. This is especially helpful if the divorce is charged with emotions. You do need your spouses name and Social Security number. You also need to determine if they are itemizing deductions.
If one spouse itemizes deductions, both must itemize .
NOTE: If you provide over half of the support for a child, then you may be able to use the head of household status .
House of Household
Tax Tips For Women Going Through Divorce
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The American poet Ogden Nash once wrote, Indoors or out, no one relaxes in March, that month of wind and taxes.
Considering the headlines out of the Midwest last week, March 2012 is unfortunately –proving him right. This month can be tumultuous on many fronts, and for women going through divorce, tax season can be particularly difficult both emotionally and financially.
In an effort to calm at least part of the storm, here are answers to some of the tax questions most divorcing women must grapple with:
What is my tax filing status?
Your federal income tax filing status is set by your marital status on the last day of the tax year.
So, if you are still married on December 31st, then you are considered married for the entire year. Likewise, if you are divorced on December 31st, then you are considered divorced for the entire year.
That part is relatively easy, but if you are legally separated, things are more complicated. Heres why:
What responsibility do I have if I sign a joint tax return?
What happens if we file jointly, and theres an overpayment of taxes?
One last word of caution
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Reporting Alimony And Child Support
As part of your divorce decree, you may agree to pay your ex-spouse alimony. Or you may be required to pay child support. Whenever money changes hands in either situation, its important to understand the potential impact on your taxes.
Whether you can deduct alimony you pay, or must include alimony payments you receive as gross income, depends on when your divorce was finalized.
If you divorced by Dec. 31, 2018, you can deduct alimony youve paid from your taxable income. If you receive alimony as part of a divorce agreement prior to Dec. 31, 2018, youll need to report it as income for the year.
However, tax reform has changed how the IRS treats alimony. For divorces finalized after Dec. 31, 2018, you wont be able to deduct any alimony you pay. But if youre the recipient of alimony, you wont have to include those payments in your taxable income.
As for child support, its never been tax deductible and wasnt ever considered income for tax purposes. Tax reform didnt change that.
Single Head Of Household
Head of household is a filing status for unmarried taxpayers who keep up a home for a Qualifying Person. Qualifying Persons are typically relatives who must meet special requirements set forth by the IRS. There are unique advantages for filing as head of household:
- You can claim the standard deduction even when your spouse files separately and itemize his or her deductions.
- Your standard deduction is higher than when you file as single or married filing separately.
- You may be able to claim certain credits .
- Income limits that reduce the child tax credit or retirement savings are higher than the income limits if you claim a filing status of married filing separately.
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I’m Legally Separated: Does That Matter
It depends. There is more than one type of separation, but not all separations are created equally. If you and your spouse stopped living together, stopped sharing expenses, and live separate lives, but neither of you filed official court documents, it will not change your tax status. You qualify as married even if you are separated as long as there is no final divorce judgment ending your marital status.
Legal separation is a legal process similar to a traditional divorce. A legal separation follows the same steps as a divorce, but you’re still legally married in the end. While a legal separation doesn’t allow either spouse to remarry legally, it does permit both spouses to file as “Single” or “Head of household” for tax purposes if the court finalized the separation before December 31.
Piedmont Triad Attorneys Advising Clients On Taxes And Divorce
Divorce involves a wide variety of issues, not the least of which are financial. When drafting your divorce agreement, it is crucial you and your spouse take into account the effects the end of the marriage will have on practical issues, like your taxes. The attorneys at Hartsoe & Associates, P.C. put their experience to work for you. We serve families and clients in Winston-Salem and Greensboro, as well as the Piedmont Triad. To schedule a consultation with an experienced lawyer, please call or fill out our contact form.
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Choosing A New Filing Status
If youre no longer married, you cant file your federal income taxes with a status of or even . Youll need to choose between single or head of household, depending on how you qualify.
Filing as head of household has some big benefits compared to filing as single, including a higher standard deduction, eligibility for some valuable tax credits, and often a lower tax rate. But you can only file as head of household if
- Youre not considered married as of Dec. 31 of the year for which youre filing the tax return.
- You paid at least half the cost of keeping up a home during the year in which youre filing.
- You have a qualifying person who either lived with you for at least half the year or who meets other specific requirements, including being temporarily absent for specific reasons. Some examples are children attending school, married children you claim as dependents, or qualifying parents you support and claim as dependents even if they dont live with you.
The noncustodial parent cant use the child to claim head-of-household status. Even if the custodial parent releases the right to claim the child by signing IRS Form 8332 , theres no exception for head-of-household status.
Should The Refund Be Divided
If you are in the middle of the divorce and are filing jointly, you need to reach an agreement with your spouse on how the refund should be divided between the two of you.
Taxes can be complicated even when youre not dealing with the added layer of divorce. This is why it is essential to consult with a CPA on all of your options before filing.
With a combined 30 years in family law, the attorneys at Jones Family Law Group, LLC, will provide the legal guidance you need. For questions or to schedule a confidential consultation, call 314-449-8830.
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How Tax Filing Status Impacts Your Support During Divorce
One of the key factors in calculating temporary support during your divorce is your tax filing status. Your support will be significantly different if youre filing jointly as opposed to head of household/separately. Additionally, although spousal support is taxable income to the payee and tax deductible to the payor, in cases where parties are filing jointly, the inclusion/deduction of spousal support is a moot point.
Its important to understand the relationship between your tax filing status and the amount of support you pay or receive. These issues need to be looked at as a whole, as they are part of the big picture. In other words, just because you might receive more support if you file your taxes separately does not automatically mean you should choose to file separately. If you end up paying more in taxes and having a lower net income, the additional support ultimately provides you no benefit.
Claim The Child And Dependent Care Credit If You Are Eligible
In previous years, the Child and Dependent Care credit was not a refundable credit. But for the 2021 tax year only, the credit will be refundable if you lived in the United States for more than half of the year. This means that even if you dont owe any taxes you could get the credit in the form of a tax refund.
Also for the 2021 tax year only, the Child and Dependent Care Credit expanded the percentage and the child care expense thresholds, so you can get a credit up to 50% of $8,000 in child care expenses for one child under 13 , an incapacitated spouse or parent, or another dependent so that you can work and up to 50% of $16,000 in expenses for families with two or more dependents.
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Don’t Classify Interim Support As Alimony
Although you may have moved out of the family home or filed for divorce, any payments you made to support your spouse before the divorce is final are not considered alimony by the IRS unless they are pursuant to a court order and specified as alimony.
Alimony payments are typically tax deductible by the person making the payments, and you may feel entitled to some tax benefit as a result of supporting your estranged spouse. However, the IRS only allows the deduction if support payments were outlined in a written separation or divorce agreement.
For divorce agreements entered into after 2018, alimony will no longer be deductible to the person paying it and will not be taxable to the person receiving it.
Remember, with TurboTax, we’ll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation.
What About If You Have One Kid Or Three Kids Who Gets To Claim Them Then
In most cases, your divorce decree will spell this out alternate years or have one parent claim all if most advantageous but pay a sum of money to the other or some other agreed-upon arrangement.
If there is no written agreement the IRS says whoever the child lives with the most gets to claim provided the child lived with the parent more than half the year.
But there are ways for the noncustodial parent to claim a qualifying child.
If the child spends equal time between both parents, then the parent with the highest adjusted gross income may claim the dependent.
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Divorce And Taxes: Filing After A Separation
For those in the process of ending their marriage, there is more to consider than a simple separation of assets. Whether legally separating or divorcing, you could be facing big changes in your individual tax situations here, Masters Law Group shares information that could help.
While most Americans are taking a sigh of relief after tax season, if you are separating from your partner, your taxes could need more attention. Much more.
Assets, Taxes and Divorce, OH MY
In the midst of a divorce, tax implications may not be the most pressing issue on your mind. However, filing taxes after you divorce and how you draw up your divorce agreement can make a big difference when it comes to getting a tax return.
The IRS lists four basic filing statuses available for individuals who are divorced or separating:
When couples get divorced, they must divide all property and debts. Couples can hire an attorney to help prepare for a financial future after divorce. Here are some important things to think about so you can stay on top of your taxes.
Determine Your Filing Status
In order to file taxes as head of household after a divorce, you must meet all three of the following requirements:
Updating Your W-4
Claiming Children as Dependents
Final Thoughts
Who Pays Back Taxes After A Divorce
Both spouses are responsible for any tax liability for years in which they were married and filed jointly, and that remains true even after a divorce, regardless of what the divorce arrangement says. However, there are a few circumstances in which one spouse or former spouse may be able to reduce or eliminate their liability. The IRS outlines specific criteria for these exceptions.
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How To Handle Taxes During And After A Divorce
Going through a divorce changes almost everything about a persons finances.
If a couple had joint held accounts, assets, and debts, they must divide them up into new, independent accounts. They also need new financial plans and strategies, which include filing tax returns as newly unmarried people.
If you recently untied the knot, here are some things to know as you file your first tax return after divorce on your own.
What Is Your Filing Status
Your filing status is likely the first question that comes to mind when you prepare to file your taxes. However, the rules surrounding married versus single designations on tax forms are quite simple.
- If the court did not finalize your divorce on or before December 31st of the tax year, you must file your taxes jointly with your former spouse or as a married person filing separately.
- If the court finalized your divorce on or before December 31st of the tax year, you can file your taxes as a single person.
When it comes to head of household status, the rules are a bit more complicated. The IRS considers you legally unmarried if you and your spouse stopped living together on or before May 31st, and you paid for 51% of your household costs. To claim head of household status, you must also meet the following criteria.
- You have a dependent, such as a child or other relatives dependent on your income.
- You have the right to claim the dependent, in accordance with your divorce terms.
- You must file a separate tax return from your former spouse.
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Can You Deduct Child Support And Alimony
Unfortunately, you can’t claim a tax deduction for child support you might pay. The IRS takes the position that if you and your ex-partner had remained married, and if your family had thus remained intact, you could not have claimed a tax deduction for money you spent feeding, clothing, and sheltering your children. These are personal expenses, and theyre still considered personal expenses after you divorce.
Determine Who Will Claim A Dependent Child If Filing Separate Returns
Generally, the parent with custody of a child can claim that child on their tax return. If parents split custody fifty-fifty and aren’t filing a joint return, they’ll have to decide which parent gets to claim the child. There are tie-breaker rules if the parents can’t agree. Child support payments aren’t deductible by the payer and aren’t taxable to the payee.
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