Posted by Larry Hurt

Recently Separated From Your Spouse or Divorced? Basic Tax Rules To Keep In Mind

Recently Separated From Your Spouse or Divorced? Basic Tax Rules To Keep In Mind

The tax period can cause more headaches in some years than others. If you recently separated from your spouse or divorced, you have many problems that you have never encountered, and you probably have questions. Here are some basic tax rules to keep in mind.

Are you married or alone?

This problem is not as black and white as it appears on the surface and is essential because it can affect your marital status.

According to the rules of the IRS, you are still technically married if your divorce is not final on December 31, even if you or your spouse has filed for divorce during the year. Also, if the court has pronounced the divorce decree on December 31, you will be considered unmarried throughout the year and, if you qualify, you must declare your taxes as individuals or as an individual head of household.

It does not matter if you and your husband live separately. They are still married according to the tax code unless a court order indicates that they are legally divorced or separated. He is no longer married and must file a single declaration if he is separated from a court decision on December 31, and not only living separately on his terms.

Legal fees

The Internal Revenue Service (IRS) does not offer deductions for court fees and court costs for divorce. However, in years before 2018, you can deduct a portion of these tax assessments and pension taxes. This may include advice on how the ongoing separation or divorce affects all types of taxes, such as income, estates, and property, at all levels of taxation. To benefit from these deductions, you need detailed statements from your lawyer that identify the expenses for each billed service. For fiscal years after 2017, these types of deductions are no longer available. 

Marital status

December 31 is an essential day for separated couples. The IRS considers that you married during the fiscal year without a separate order for the last day of the year. If you are married per IRS standards, you can only choose the status "married by filing a joint return" or "married by submitting a separate statement." You cannot be presented as "alone" or "head of household."

The way the IRS respects the divorce laws in the states where you live also influences your choices. In Texas, for example, you remain financially married until divorce, even if you are legally separated.

Common profitability considerations

The status of your deposit affects the tax rate and determines the loans you can apply for. The joint deposit may involve a lower tax account than the separate deposit; therefore, the IRS recommends that you calculate your tax liability as a single, standard file to determine which one offers the best savings.

However, public transport can present risks when you share the responsibility for taxes due, as well as fines and interest. This means that if your spouse jumps taxes, you will have to pay them. The IRS may release you from your partner's tax obligations based on the information provided in the 8857 innocent woman waiver application form.

Married filing separately

The IRS recognizes that separate storage generates more taxes, but avoids sharing responsibility for any tax liability. As a married person making a separate declaration, you must accept the deduction or standard details: where applicable, both must specify. You must limit your individual deductions, such as interest on mortgages and property taxes, to what you paid as an individual, even if you can split medical expenses paid by a current account. By submitting a separate statement, you lose the opportunity to claim work income and graduate tax credits, among other interruptions offered by the IRS.

Legally Separate File Options

If tax law considers you "single" because you have received a decree to maintain the separation before December 31, you can file a complaint with the status of "single" or "head of household."

The "head of household" requires that you have a dependent and that you pay at least half the cost of maintaining a home. If the dependent is a child living with you more than your spouse, the IRS considers you as the custodial parent. Your deductions and credits as a custodial parent depend on your spouse's acceptance of your ability to claim your child as an employee; only one of you can claim the child as an employee. When you can claim your child as an employee, you can apply for a loan for your child.

Larry Hurt
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