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How Divorce Affects Your Taxes

What You Need To Know About How Divorce Impacts Your Taxes

Tax time is never the most fun, but some years it’s even worse than others. If you’ve recently gotten a divorce or separate from your spouse there are a whole host of issues that you’re going to have to face which you may not have dealt with before. Here are a few tax rules to keep in mind. Here’s what you need to know about how divorce affects your taxes.

Your Marriage Status

First, you are going to need to consider your filing status (i.e. “Married Filing Jointly,” “Married Filing Single,’’ “Head of Household,” etc.). As far as the IRS is concerned, all that matters is whether or not you are married on December 31st. If so, then it’s as if you were or are married for the entire year. If, on the other hand, you get divorced by December 31, it is as if you are divorced for the whole year.  So, if you were divorced prior to December 31st of the year in question, you must file as either “Head of Household” or “Single.”

Filing as “Head Of Household” is usually less expensive than filing as single. However, you have to make sure that the necessary requirements:

  • You must have paid at more than half of that year’s housing costs.
  • You must have lived apart from your spouse in the second-half of that year in which you are claiming to be the head of household.
  • Whether dependent children lived in the home for at least one-half of the year.

If, on the other hand, you are separated from your spouse (i.e. you aren’t living together), but you are still married, then yes, you’re able to file a joint return. This can be helpful in some cases because if you both have an income you can combine these on paper for tax purposes. Sometimes that will enable you to qualify for a greater deduction. But this isn’t really black-and-white, either.

In 2018 your standard deduction is $12,000 if you file a separate married return (which is up from $6,350 in 2017). This is the same as it is for “single” tax-filers. The standard deduction for those who are married and filing jointly is $24,000 in 2018, which is exactly double.

Who Gets To Claim The Kids

Okay, so what about dependents? According to the IRS, only one parent can claim a child on their tax return in any given year. There are loopholes though. If, for example, you have more than one child, you can claim one and your partner can claim the other. This is actual quite common. But if you have only one child or you have an odd number of children, you and your spouse can’t simultaneously claim any of them in the same tax year.

In the event of both spouses trying to claim the same child, the IRS has a tie-breaking rule which, in short, says that the child (for tax purposes) goes to the parent who has custody of the child the most often. The minimum amount of time your child must have lived with you before you can call them a dependent is six months.

Still struggling with your taxes after getting a divorce? Give Ayar Law a call today at (248) 262-3400.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.

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