If you’re newly divorced and have to file taxes for the first time without a spouse, you may be wondering how exactly to file them with your new marital status. There are certain situations that can complicate filing taxes after divorce: dependants, assets, if you remarried within the same year, etc.
Going through a divorce will change and can complicate your tax filings. It is important to note that most divorce lawyers are not tax experts and do not give tax advice. They typically will send you to an expert in the tax area.
New Filing Status
No longer a Mrs. or a Mr. to your former spouse? If you were previously “married and filed jointly” then filing this year’s tax return will be a little different than previous years. While you formerly combined things like W2s, 1099s, assets, etc., your new status will change things.
Choosing your filing status can be overwhelming following a divorce. If you are still married through the end of the tax year (2020) you’re still required to file as married since your divorce was not finalized before the end of the year. You can only file as “single” if your divorce decree was signed on or before December 31, 2020. For example, if your divorce was final on December 31, 2020, you must file as “single” or “head of household” depending on your eligibility. If your divorce was final on January 1, 2021, you must choose a married filing status for tax year 2020 – either married filing jointly or married filing separately.
It is always prudent to speak to your Certified Public Accountant or other tax professional when filing your taxes, especially after life-changing events such as a divorce.
If you and your spouse previously filed as “married filing jointly” and you have dependents (children), then you claimed your dependents together. But what happens when you divorce and file your taxes separately for the first time post-divorce?
Children can’t be claimed by both former spouses. If they are then things get messy. If your divorce case is ongoing please bring this to the attention of your divorce lawyer. This may be able to be sorted out as part of the resolution of your case. If your case is over, often your divorce decree will spell out who gets to claim the kids. If you were supposed to but your spouse did, please bring this to the attention of your lawyer. They may be able to file a motion to hold your ex in contempt.
Alimony/Spousal Maintenance & Child Support
It used to be that alimony/spousal maintenance was able to be deducted in taxes by the payee and the one receiving the payments was taxed on the income. The Tax Cuts and Jobs Act has changed previous rules for all divorces starting on January 1, 2019. If you are seeking a modification of maintenance of an order which was entered prior to January 1, 2019, it can get complicated and you should probably seek legal advice.
Now, the former spouse who pays the alimony/spousal maintenance payments cannot deduct them on their taxes. In return, the former spouse who receives the alimony/spousal maintenance payments does not need to include them in their reported income. Ultimately, the one making the payments will be taxed on the income according to their tax bracket.
Child support is different – child support payments have historically not qualified as deductions. Furthermore, if you are the one receiving the child support payments from the payee then you cannot include said payments on your taxes as income. In short, child support payments should not be documented on either parties’ taxes.
The choice of a lawyer is an important decision and should not be based solely upon advertisements.