Getting a Divorce? Top 3 Tax Tips to Consider
Taxes aren't fun to think about in the best of times. And if you're going through a divorce, how such a split may affect your taxes might be the furthest from your mind.
But if you're not paying attention, you could take a bigger tax hit than necessary. So here are some potential ways to protect yourself come tax season:
1. Make Sure You're Both On the Same Page.
Many, if not most, divorces are more acrimonious than harmonious. The thought of communicating extensively with your ex, especially about taxes, may sound terrible now, but having a "collaborative divorce" may be beneficial down the road.
This is especially true when it comes to your tax filing. Imagine, for a moment, that you file a joint tax return for your last year of marriage while your ex files a separate return for the same year. That's a pretty good way to get the IRS knocking on your door, so make sure you both know exactly how the divorce will affect your tax liability and what to file.
2. Know What's On Your Tax Return.
We can't stress this enough: read your tax return before you file it. If you file a joint return with your ex, the IRA will presume that you read it and consented to it, so you might as well make sure that their presumption is correct.
First, you can make sure your ex isn't pulling any funny stuff with the return. Funny stuff for which you could be held jointly liable. Being familiar with the tax filing may also help you determine what, if any, type of filing is best for you.
3. Figure Out Who's Claiming the Kids.
This is the big one. Just about all of us know that claiming a dependent gets us a tax exemption. So determining which spouse gets to claim a child as a dependent can have a huge impact on your tax filing.
Normally, the deduction goes to the custodial parent -- the one the child has spent the majority of nights with over the preceding year. However, if you and your ex have joint custody, you can agree to take turns with the dependent claim, alternating each year. If you're able to come to such an agreement with your ex, it's best to have it in writing in your separation agreement or divorce decree.
Divorce and tax matters are complicated enough on their own, and there may be things an experienced tax lawyer can do that you may not.
- Browse Divorce Lawyers by Location (FindLaw Directory)
- IRS Case Offers Joint Tax Return Lessons for Divorcing Couples (FindLaw's Law and Daily Life)
- 3 Reasons to Get a Separation Instead of Divorce (FindLaw's Law and Daily Life)
- The FindLaw Guide to Getting a Divorce (FindLaw)