Divorce and Taxes: Top Questions Answered

divorce taxesIt’s that time of year again – and we’re not talking about springtime (although that’s likely a much more pleasant topic). That’s right, April 15 is around the corner and if you’re going through a divorce, you might have a few questions on your taxes – and your filing status.

We know that going through a divorce is a difficult thing. You likely have anything but taxes on your mind right now. But tackling those IRS forms is part of life. If you’re going through a divorce, here are a few quick answers to some of the most commonly asked questions about taxes and divorce.

What is my filing status?

If you’re going through the divorce process but it is not yet finalized, you have a couple of options. You can either file with a joint return, or file as “married filing separately.” If your divorce decree was final as of December 31, 2014, you’re good to file as single. If not, choose one of the aforementioned options.

Who gets to claim the kids?

Kids and other dependents can translate to big bucks on a tax return, so you might be tempted to hoard that exemption. But you’ll only be able to claim children as dependents if they lived with you for a bigger chunk of the year than they did your ex-spouse. Unless your ex-spouse is willing to sign a waiver that he or she won’t claim the child, you’ll have to meet the custodial criteria.

What about medical expenses?

Even if you can’t claim your children as dependents, you can add any medical bills you paid on their behalf to your own in your tax return.

What about tax credits?

It’s the same idea here as with claiming dependents; if you do not have custody of the child the majority of the time (thus, you can’t claim the child as a dependent), you can’t take child tax credit either. Additionally, you won’t be able to claim the Lifetime Learning higher education credit.

Can I deduct alimony?

You bet. Even if you don’t itemize your deductions, you can take a deduction for alimony payments that you made. That said, your payments only count as “alimony” if they are made in cash and specified in the divorce agreement. On the other hand, your ex-spouse will be required to pay taxes on the alimony received.

Got questions or need some assistance navigating the complicated road to divorce? Give us a call today.