Taxes after Divorce: What You Need to Know

Taxes after Divorce: What You Need to Know

Obtaining a divorce marks an important turning point in a person’s life that can have impacts that many people do not realize until much later. One significant change in a person’s life both during the divorce process and after is the change in tax status while filing. Your taxes after divorce can change in the following ways: Your divorce can alter the status under which you file and can change the tax exemptions you qualify for, who can claim which exemptions, and ultimately how much you may receive from a tax return.

A Change In Your Tax Filing Status

The first step in filing taxes is to determine your marital status. The Internal Revenue Service (IRS) requires that if you are considered legally divorced as of the last day of the calendar you must file as either “single” or “head of household.” You are able but not legally required to file as either of these statuses if you are not divorced yet but have a legally binding separation agreement, or if you and your spouse have lived separately for at least the last six consecutive months of the tax year. If you are still legally married as of the end of the calendar year and were still living together, you are legally required to file as either “married filing jointly” or “married filing separately.”

Divorce’s Impact On Your Tax Return

Most people are familiar with the fact that your filing status will impact the amount of your tax return. Couples who file as “married filing jointly” or individuals who file “head of household” generally pay lower taxes and therefore usually receive a large return. Therefore, if you are filing as “single” or “married filing separately,” it is likely that you will incur a larger tax bill than usual, thus lowering the amount received in your return.

If you do choose to file as “married filing jointly,” be aware that you and your spouse are both held accountable for the information on your tax filings. Failure to include income or assets can incur penalties, delays in your tax return, and the scrutiny of the IRS.

Tax Returns and Dependent Exemptions

You should be warned that any tax return that you receive from filing as “married filing jointly” will be marital property. A common item that divorcing spouses fight over is the money that will be received from the tax return. Failure to divide up the return before filing your taxes could result in further conflict with your spouse.

Only one tax filing can claim an individual as a dependent. The IRS considers by default that the parent with primary custody of a child will claim the child as a dependent on their tax return. However, this is not always the case. Many couples choose to divide up exemptions or allow the non-primary custodial parent to claim the child as a dependent.

Confused about Taxes After Divorce? Talk to our Charleston, SC Divorce Lawyers

The attorneys at Klok Law Firm LLC have decades of experience handling family law matters. From adoption, child custody, child support, and divorce, our attorneys can guide you through any family law matter that may arise, including issues related to tax filings, returns and other related areas after a divorce.

Contact our attorneys today to schedule a free initial consultation.