What You Need to Know About Divorce and Taxes

Divorce can upend your life and alter how you submit your taxes. We address frequently asked tax queries to make submitting a little simpler.

What you will discover:

What is the state of my filing?
Do I need to make any changes to my W-4?
Is it possible to claim alimony?
Can I subtract legal costs or other divorce-related expenses?
Is my partner eligible for the kid benefit and exemptions?
Should I file for child support?

Taxes are difficult for almost everyone. Divorce causes a lot of turmoil, but it can also affect how you submit your taxes. Continue reading to find out the six most frequently requested concerns about taxation and divorce.

What is the state of my filing?

Your tax filing status is determined by your marriage state at the conclusion of the year. If your divorce is completed on or before December 31, you must register as a single, unattached person. Under certain circumstances, if you have children, you may still register as “Head of Household.”

If your divorce was not completed by the end of the tax year, you may submit either separately or jointly, though equally filing may be more difficult. If you have any further concerns about the various reporting situations or your specific circumstance, you should consult with a tax expert.

Do I need to make any changes to my W-4?

Based on your W-4, your company determines your tax withholdings. Married partners will typically file collectively in order to obtain benefits and a reduced tax rate. Following a divorce, you may want to file a new W-4 so that your workplace deducts a more suitable quantity of revenue from your salary.

Is it possible to claim alimony?

If the split was completed before the end of 2018, remittances to or from an ex-spouse could be deemed alimony for federal tax reasons, according to the IRS.

The IRS considers the following criteria when determining whether a payout qualifies as alimony:

You do not register collectively.
You no longer live in the same home.
The money is made in currency. (including checks or money orders).
The payout is paid in accordance with the terms of a divorce judgment or split agreement.
The payout is not designated as anything other than alimony in the divorce judgment or split agreement.
The money is not intended to be child support or a property deal.

For divorces completed after January 1, 2019, alimony payments are no longer exempt.

Can I subtract legal costs or other divorce-related expenses?

Although divorce-related attorney bills and judicial costs are not tax deductible, other divorce-related expenditures are. A tax expert can assist you in determining which expenditures are deductible.

You may claim a part of these attorney costs if you are pursuing divorce or have tax concerns. On a Form 1040 Schedule A, this can be claimed as a Miscellaneous Itemized Deduction.

Is my partner eligible for the kid benefit and exemptions?

In most cases, only one partner can receive the child tax benefit and associated deductions. This is typically the primary spouse. The primary parent is usually decided by the number of nights the kid stays at the parent’s house or by the terms of a Divorce Settlement Agreement. Shared parenting parents may be able to agree to alternate taking the honor.

Should I file for child support?

Child support payments are neither tax exempt nor chargeable revenue for the receiver. However, if either spouse is deemed the primary parent or if it is stated in the Divorce Settlement Agreement, either parent may be able to claim the kid as a dependent.