When you got married and your tax status changed from single, it affected your taxes. Getting a divorce is no different. It is important to educate yourself on what these changes may mean. Below are a few items to keep in mind when filing your taxes.
Taxes are complicated and unique depending on your circumstances, especially following a divorce, so always check with your tax advisor on any items or reach our to one of our Specialists if you need guidance.
#1: Confirm your Tax Status
- If your divorce decree is finalized before December 31, you will likely need to change your filing status to single even if you were married for most of the year.
- If your divorce is in process but isn’t finalized, you will probably file as married filing separately.
#1a: Determine if you are Head of Household
- Both parents are allowed to file as Head of Household only if they each have a child living with them for more than half of the year (essentially if you have two or more children and one lives with you for more than half of the year and the other lives with your ex for more that half of the year).
- If your divorce was finalized before December 31 and you are considering filing as head of household, there are a few criteria to meet. Head of Household status is usually determined by your custody agreement. If you have custody of your child/children for more than half of the year, you may be able to file as Head of Household.
- If you are married filing separately than you have to meet the following criteria in order to file as Head of Household:
- You must maintain a household for your child (even if you do not claim them as a dependent)
- You must be unmarried at the end of the year or living apart from your spouse for more than six months
- The household must be your home and generally must also be the main home of the qualifying dependent (i.e. they live there more than half the year)
- You must provide more than half the cost of maintaining the household
- You must be a U.S. citizen or resident alien for the entire tax year
#2: Claiming Dependents
According to the IRS the parent that qualifies for using the child as a dependent while filing taxes is the custodial parent. To qualify you must either:
- Have sole or full custody of your child/children or;
- Have the child/children living with you for a greater number of nights then your ex during the year
If you were divorced or separated during the year, the custodial parent is the parent with whom the child spent more nights with the remainder of the year after you separated or divorced.
As with most things, there are exceptions. One exception would be if a non-custodial parent has negotiated a dependency exemption in their decree. These exceptions require additional paperwork so be sure you consult with your tax advisor.
#3: Make Sure You File Your Name Change
Name change is common after divorce but it is important to remember to make sure the change is reported to your local Social Security Administration office before you file your tax return. The names on both your tax return and social security card must match.
Check out www.GetYourNameBack.com for tools to make the name change process much easier.
#4 Be Aware of Joint Responsibility
Even if your divorce decree states that your former spouse will be responsible for taxes due on previously filed joint tax returns, you may be held responsible jointly and individually for any tax, interest and penalties due on a joint return filed before your divorce.
If you can, make sure you have a tax advisor take a second look as previous tax filings to minimize any risk.
Divorce can make tax filing a challenging process. Reach out to one of our tax Specialists or your tax advisor for guidance and help if you need support.