Post-Divorce Tax Tips
After a divorce, one of the biggest difficulties you face is understanding how to do your taxes. You may need to update your legal name, change your filing status, understand the new nationwide rules for alimony payments, figure out who can claim dependents, double-check your withholdings, and fulfill other requirements at both the state and federal level.
There are many myths and misconceptions surrounding joint vs. single filing, which is why we at Huguenor Mattis, A.P.C., have broken down the most important things you need to figure out.
1. Confirm Your Filing Status
The tax year begins on January 1st and ends on December 31st. If your divorce was finalized anytime during that period in the last tax year, then you must file as single. You can only file jointly if your divorce was finalized after December 31st. Filing as single means that you will lose out on certain tax deductions, which is why many couples choose to finalize their divorces in January. You may also select the “filing separately” option if you do not wish to file jointly.
It is important to remember the difference between a divorce and a decree of legal separation. If you received a decree of legal separation on or before December 31st, then you cannot choose to file jointly. This is because the IRS considers both of you single for tax purposes. But, if you did not receive this decree during the previous tax year, you can choose to file jointly.
Even if you are filing as single, you may still be eligible for some tax deductions, but this may depend on your dependents.
2. Determine Any Dependents
One option for single parents when filing taxes is to file as a head of household. Head of household means that you are filing for yourself and for your household, which can include any dependents, and that you are unmarried. Unmarried, to the IRS, does not mean you are divorced, just that:
- your spouse has not lived with you for at least six months,
- you paid the majority of money to support your household, and
- your spouse was not gone temporarily.
The head of household option is only available to one parent. To qualify, you must show that you can claim your child as a dependent and that your child lived with you for more than 50% of the year. You can continue to check the head-of-household box if your child is under the age of 19, or under the age of 24 and a student. However, if both parents have joint custody and evenly split support and time with the child, then neither one can file as a head of household.
3. Review Your Withholdings
Another important step is filing a new W-4 with your employer. Your new W-4 will adjust the amount of withholdings your employer will pull from each paycheck, and must be adjusted to your new status as single. This is a simple but important task.
4. Update Your Legal Name
Another simple but important step is updating your information with the IRS. These two main pieces of information are your legal name and physical/mailing address. If you have changed your name post-divorce, you will need to request a new Social Security card from the Social Security Administration by filing Form 8822. For your address, you will need to file Form SS-5 with the IRS.
5. A Note About Alimony and Child Support
As of December 31, 2018, alimony is no longer tax-deductible or taxable income according to the Tax Cuts and Job Act. In addition, child support is also not tax-deductible or taxable income. As such, you do not need to report these assets on your tax forms.
Preparing Your Taxes During Your Divorce
If you are considering a divorce or legally separated from your spouse and have questions about the impact on your taxes, reach out to a San Diego family law attorney at Huguenor Mattis, A.P.C. Our legal team has more than 45 years of experience, and Thomas M. Huguenor is a certified family-law specialist. We understand the many complex issues couples go through during a divorce and the requirements they have to abide by when filing taxes. We can discuss your case in a free consultation and explain your best options. Call us today at (858) 458-9500.