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Divorce and Your Taxes

Divorce and Your Taxes

When you are going through a divorce, things can get messy. You and your ex-spouse may not be getting along and there is a lot of fighting that can occur. While this is a trying time, it is still important to remember that things are going to be different when you get to tax season. This is the last thing that you want to think about, but preparing ahead of time can make a difference on what can be claimed on the tax return, such as who can claim the kids on their returns, and other important factors. This is especially important if the court decision has not finished and the estate and other items have not been split up by the court.


Going through a divorce is hard enough. Don’t spend too much time worrying about your tax filing and what you will need to do to get through the tax season. Contact the professionals at L. James and Associates if you need someone to help out with your tax return this year.


Filing Status

 

If you are in the process of getting divorced by the end of your tax year, there are some options that you can choose. Since you are still married, you can still get the joint tax return. Sometimes this is easiest because it allows you to claim all the things you did before and it doesn’t take as much work to figure out who will split up what. It is possible to file separately as well, but keep in mind this does lose out on some of the deductions and credits when married.


On the other hand, if you are divorced by December 31 of the year, you are going to need to file separately. Even if you were married the whole year until December 29, you would still file separately. There is also the option to do a head of household so you get better tax brackets and deductions for taking care of dependents who lived with you for most of the year or for paying most of the amount of your home.


Figuring out your filing status during the year is sometimes difficult and many do not understand the cut off days that are in place. If you need help with any of this information, make sure to contact the professionals at L. James and Associates to get this done.


Exemptions for  Dependents

 

The dependent exemption is going to vary depending on how long the children lived with you. If the children spent the majority of the year with you instead of your ex-spouse, you are the one who can claim the child. You and the ex-spouse are allowed to switch who gets to claim the child, but make sure that you are on the same page. It is not allowed for both parents to claim the children on their tax return once the divorce is over.


Possible Deductions


There are a variety of deductions that you can claim on your tax return after divorce depending on how the divorce ended. Some of the other deductions that the professionals at L. James and Associates can help you with include:


  • Medical expenses—if you pay any medical expenses for your children after the divorce, you can deduct these in your tax return.
  • Tax credits—the parent who is allowed to claim the dependents are also able to get the child credit, the Lifetime Learning tax credit, and the American Opportunity credit. If you are not the custodial parent, you are not able to claim any of these deductions.
  • Ex-spouse payments—if you are the one who pays alimony, you can use this as a deduction, even when you aren’t using itemization on the tax return. The IRS is not going to count this as a deduction unless you pay with cash and the alimony is part of the divorce decree. If you are paying out of morals and there are no legal documents requiring this, you cannot claim this.
  • Home sales—if you and your spouse decide to sell the family home, there could be some capital gains implications. If you both met the use and ownership rules, you can each exclude up to $250,000 on your tax return. With the divorce, you could get an exclusion to help save money if you didn’t live there for two years.

Figuring out your taxes after you have gone through a divorce is not an easy process to go through. You need to figure out who is in charge of the different expenses and who is allowed to make certain claims throughout the year. If you need help getting your tax return done at the end of the year, make sure to contact the professionals at L. James and Associates to help you get this done.


Dealing with a divorce is not easy on anyone. There are a lot of things that are going to change with your life and taxes are one of the last things you want to think about. But when it is time to do your taxes, you may be surprised at how many things have changed in the past year. When you are ready to file your taxes after a divorce, make sure to contact Lou J Arellano from L. James and Associates in Denver, CO to ensure that you are getting the best help with your tax return. Contact us today to get started.

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