Following legal separation or divorce some people may not realize the changes in tax filing that are ahead. There is more to deal with beyond who  gets what deductions; the array of issues you need to address is quite extensive.

Filing Status Rules 

One’s filing status is based on whether they were married on January 31^st of the tax year in question. Even couples who were not physically living together at the end of the year are considered married by the IRS if there is no legal separation or divorce on the books. That status impacts one’s standard deduction, filing requirements, and whether one is eligible for certain tax credits.

When is Filing as Single Required?

• Anyone must file as single if their legal divorce or legal separation is documented in the tax year under consideration;
• The exception is that one may file as head of household if one remarries in the same year as the divorce occurred.

For Those Still Married at on January 31 

There are a few options for those who are still legally married at the end of the year:

• They may file jointly as married, thus enabling them to combine both incomes and deduct allowable expenses. (This generally results in a lower tax burden).
• They may file as married filing separately, having each person file a separate return while listing just their own individual income and deductions, as well taking advantage of any tax credits for which they are eligible.
• One person may file as head of household if they are still married and/or legally separated, if they meet all three of these criteria
  • The person lived apart from their spouse for at least the last six months of the year in question;
  • The individual paid more than half of any home expenses for the year;
  • A dependent child lived in the individual’s home for more than half of the year.

After a Marriage Annulment 

• Amended returns must be filed for any tax years impacted by an annulment by the later of two dates:
• Within the statute of limitations (three years) from the filing of the original return, or;
• Two years after paying the tax.

Support Payments 

• Child support payments are not deductible for the payer and need not be claimed as income by the recipient.
• Anyone divorced prior to 2019 must abide by rules saying that alimony payments may be deducted by the payer and included as income by the recipient;
• Anyone divorced during or after 2019 has different alimony rules, indicating that payers may not deduct the payments, and recipients are not required to claim the money as income.

Claiming Dependent Children 

Generally speaking, the custodial parent is able to claim dependent children on their taxes –unless stipulated differently in the divorce decree. In joint custody situations, the parents may choose how they want to handle this issue. Some may decide to alternate claiming the deduction every other year, while others with multiple children may have certain kids assigned to each parent, for example. When parents can’t agree on how to handle this matter, the IRS has tie-breaker rules to make the determination for them. 

Advocating for You 

The experienced Baltimore divorce attorneys at The Law Office of Hasson D. Barnes always help you to achieve the best possible outcomes in an annulment, legal separation or divorce. To discuss your questions, schedule a confidential consultation in our Baltimore office today.

Source:

irs.gov/newsroom/some-tax-considerations-for-people-who-are-separating-or-divorcing