A divorce involves many complex and serious life changes for any couple. One of these issues that Plano residents may wish to be aware of is the effect that a divorce has on a person’s taxes.
Several aspects should be considered when evaluating these changes. First, someone’s tax status is likely to change. The choice of which year to make the change from married to single depends on the date of the actual divorce. If the divorce is finalized at any time before the end of the year, the person’s filing status will be single. However, if the couple is merely separated, both spouses should still be filing their taxes as married. After the divorce, the parent who lives with the dependent children may also opt to file as head of household. A tax professional or do-it-yourself tax preparation software should be able to compare the effects of the different filing statuses to maximize the filer’s tax benefits.
Whether or not expenses related to divorce are deductible is another issue many people run into. The costs of the divorce, by themselves, are generally not deductible. However, legal fees for advice about the tax changes that come with divorce and having to do with receiving alimony may be deductible. With alimony, if the filer is the one is making payments, those payments can be deducted. If the filer is receiving the payments, though, they must report them as taxable income.
Figuring out the answers to all of the intricate tax questions that accompany a divorce can be difficult. The help of an attorney with experience in family law may be useful in walking someone through any issues that arise before, during and after a divorce.
Source: Yuma News Now, “How Marriage And Divorce Can Impact Your Taxes”, April 05, 2014