The financial ramifications of your divorce may last longer and require more life changes than any other side effect of your split. Your taxes are one aspect of your finances that will see some differences.
When you know the tax implications that divorce can have, you can better prepare for what is next. Your knowledge can help you make informed decisions so you can get your finances back on track.
Filing status
Out of habit, you might almost select “married” on your status when filing your taxes. However, now divorced, you will need to fill in the bubble that says, “single,” or “head of household.” While the details of your situation will impact this change, most times an update to your filing status can benefit you.
Child support
You cannot deduct child support payments on your tax forms. On the flip side, if you receive child support payments, they are not subject to income tax. However, according to the IRS, after divorce, you will need to determine who will claim your child as a dependent on tax forms.
Mortgage Tax
Mortgage or property tax can get a little confusing, especially the year of your divorce. You will need to collaborate with your soon-to-be ex to determine who will claim deductions. Whichever person claims the deductions, will need to pay the other party out. If you and your former partner cannot reach an amicable solution, the court may help determine the outcome.
You might consider hiring someone to help you with the financial and tax repercussions of your divorce. Your diligence in making sure you do not miss any critical obligations can prevent costly mistakes. With the right help and your own proactive approach, you can gradually rebuild your finances and put your marriage in the past.
