Attorney Katherine Kraus

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in Peoria!!!

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in Peoria!!!

How will divorce impact your taxes?

On Behalf of | Dec 29, 2018 | Uncategorized

Divorcing your spouse has implications on virtually every aspect of your life, including taxes. Filing your taxes is already complex enough, so you may have some concerns about how the divorce will make it even worse. Getting a divorce does not necessarily make your taxes more complicated, but it certainly changes a few things.

Ending your marriage may affect your filing status and ability to claim dependents. In addition, alimony may impact how you report or pay your taxes.

Filing status

After your divorce, you will not be able to file your taxes as married filing jointly or separately. You must choose to file as either single or head of household. Only one of you can file as head of household. In order to qualify as head of household, you must be responsible for at least half the expenses of maintaining your home during the filing year. 

Claiming dependents

Only one parent gets to claim the children as dependents. Generally, the custodial parent claims the children. However, you and the other parent can decide who gets to do this. The parent who claims the children can benefit from receiving various tax credits. However, the dependency exemption that allowed the parent to deduct up to $4,050 is no longer available until 2026.

Alimony

New tax laws are in effect that change the way the IRS treats alimony. The tax reform causes the payment to be non-deductible. Additionally, the recipient of spousal support does not need to report it as taxable income. You must anticipate how these new laws will change your divorce in 2019.

Divorce and taxes are both strenuous and convoluted things on their own. When your divorce changes your taxes, it can feel like a whirlwind of confusion. However, financial and legal professionals will be able to keep you on the right track. You can take some actions to make your post-divorce tax filing as easy as possible.

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