Divorces can be tricky, especially when tax season comes around.
Divorce usually brings a lot of changes to the way individuals file their taxes, including what exemptions and deductions someone is able to claim. Couples who have recently divorced should consider the most common questions divorced individuals face when filing taxes on their own.
Below is a list of the most common questions and tips for filing taxes after divorce:
What is your filing status? Filing status is determined on December 31 so many couples in the process of getting divorced still file as “married, filing jointly.” Most of the time it is financially beneficial to file taxes jointly rather than as single.
Who can claim dependents? The custodial parent is able to claim children as dependents on their tax returns unless their divorce decree specifically says otherwise. If both parents share equal custody of their children, then the parent who pays child support is able to claim the children as dependents. If no one pays child support, then the parent with the higher gross income is able to claim the children.
Can you deduct child support? Individuals cannot deduct child support payments. However, parents who help pay for their child’s college tuition can deduct up to $8,500 through the Tuition and Fees deduction and the American Opportunity Tax Credit.
Can you deduct alimony? There are four circumstances where an individual can deduct alimony payments. The four circumstances are that the alimony is made according to a written agreement or judgment, you are not a member of the same household, the payments are not child support and alimony payments will end upon the ex’s death.
Can you deduct divorce attorney fees? In most cases, you cannot deduct divorce attorney fees. However, individuals can deduct some the costs they had as a result of their divorce. The fees that can be deducted include fees paid for tax planning during or after your divorce, fees paid to obtain taxable income and fees paid for securing an interest in a qualified retirement plan. Be aware that in order to deduct these fees, an individual will have to itemize their deductions and the deductions cannot pass the two percent adjusted gross income test.
Source: Huffington Post, “Divorce Tax Tips: Five Most Common Tax Questions,” Joseph E. Cordell, Jan. 29, 2013