Before your divorce is finalized, you have certain things to consider, such as, living arrangements, child custody issues and beginning your life anew. Planning for life after divorce doesn’t stop when the papers are signed. Whether you file taxes online or complete with the paper form, you have to consider some things during the filing process.
1. Name Change
Your last name must match your official name with the Social Security Administration. If you plan to go by your maiden name instead of your married name, then you must make that change with the Social Security Administration before filing your taxes. If you don’t, you’ll have to use your current last name on your tax returns.
The Internal Revenue Service checks all personal information on tax returns even if you go through a tax preparation service. If you use a name that does not match with Social Security on your tax returns, you could delay any tax refund you are entitled to receive.
After your divorce, you have to decide what your filing status will be. When you were married, you had the choice of filing a joint tax return or filing separately. Now your options have changed. They include:
If you choose to file single, you have to be divorced for the entire year.
• Head of Household
You can use this filing status if you have qualifying children or are single and paid more than half the cost of maintaining your home.
3. Claiming Dependents
You’ve probably outlined your child custody agreement already. How you and your ex-spouse decide on child custody issues impacts your taxes. For instance, if you are the custodial parent you can claim your child or children as dependents on your tax return. However, if you are the noncustodial parent, you typically can’t. Deciding who the custodial parent is depends on the number of nights your child or children stay with you during the year. Most of the time, you don’t have to count the nights because the child custody issues already outline those nights in the order.
4. Child Custody Payments
Typically, child support is a tax-neutral issue. As the payer, you must know that child support isn’t tax deductible. If you’re receiving the child support, it’s important to note that the IRS doesn’t consider it income.
5. Alimony Payments
Alimony payments are taxable income for the person receiving it. The payments are also tax deductible for the payer. If you live together after the divorce, you typically can’t receive the deduction.
Whether you plan to file taxes online or by mail, it’s important to consider how your divorce impacts your taxes.