Death, Divorce, & Taxes
Death and taxes: You know the saying. We can’t really escape either, so I’m going to group divorce in this category too; the ripple of divorce is almost inescapable and the loss from a divorce is equatable to a death.
The last, like maybe the very last, thing you want to think about during the emotion and tumult of divorce are your taxes. But taxes can sneak up and knock you right over if you haven’t considered a few things: alimony, child support, how to file during and after, and surprises from previous years. All of the information provided here was found at IRS.gov and we recommend perusing the details yourself.
Alimony – Alimony is tax deductible for the payer. The spouse receiving the alimony must claim the amount as taxable income.
Child Support- As opposed to alimony, child support payments do not have to be reported as income and the payer cannot claim the support on his or her taxes.
Filing – How do you file? Joint? Married? Single? It’s relatively simple: if you were married during the year you are filing your taxes, then you file as you normally have; if you file during a year you haven’t been married then you are on your own, kid! Be sure and consult your decree for details about which spouse claims any children as dependents.
Previous Years – The thing to remember here is that when you file you are responsible for any tax, interest, or penalty due with a joint return. There are only three types of relief from joint liability: innocent spouse relief; separation of liability (divorced, widowed, legally separated); equitable relief. You might be responsible for taxes owed from previous years, even if you are now divorced so make sure you check on all of the details.
Things can be much more complicated, but we hope these few topics help make two of the toughest realities a little less stressful.