Taxes and Divorce
When Utah couples and families find themselves facing the prospect of divorce, a seemingly endless list of factors and considerations may come to mind. And in cases involving children, parents often try to account for all of their kid’s potential needs and concerns before they arise.
FACTORING TAXES INTO THE DIVORCE EQUATION
What many people do not think about, however, is how divorce can affect their taxes. Given that it is tax season, here are a few tips couples should keep in mind during and after the divorce mediation process.
Filing status options
When it comes time to file taxes after a divorce, many people are confused about which status to file under. The simple answer is that your tax status depends on your marital status. For instance, anyone that divorced at any point in 2013 can file their tax returns as single for that year. Beyond that, many separating couples also have the option of claiming the head-out-household deduction. The individual that applies for the deduction must be the primary household provider and the couple must have lived separately for at least six months.
Support payments and taxes
Surprising to many people is the fact that child support payments are not taxable or tax-deductible. However, alimony is considered tax-deductible for the individual that pays it, while the person that receives it is responsible for paying taxes on the sum.
For families with children, it’s important to discuss and agree upon which parent will claim which child/children as dependents in their tax returns. A specific IRS form is required to identify dependents, and each federal deduction is considerable. Parents should keep in mind, though, that dependents should be 18 years old or younger and live with the parent claiming them for more than six months out of the year in most cases.
DO I HAVE TO PAY TAXES ON CHILD SUPPORT?
When it comes to tax season, people often have all sorts of questions. However, if you recently split up with your spouse, you may have even more uncertainties. For example, you could be wondering if child support payments that you have received are taxable. In Salt Lake City, and every other part of Utah, it is crucial for you to familiarize yourself with all of your post-divorce obligations, which may include understanding how your divorce will affect your tax return.
According to the Internal Revenue Service, you do not count child support payments that you have received as part of your taxable income. In other words, you do not pay taxes on child support payments. Not only are these payments not taxable for the recipient, but those who pay child support are not able to deduct their child support payments either. Having said that, other financial arrangements that arise after a divorce, such as the payment of alimony, may require recipients and payers to include the payments on their tax returns.
If you have yet to file your tax return and are unsure of how a recent divorce may impact your taxes, it is very important to find answers to any questions that still remain. In addition to tax matters, divorce can change life in various ways and lead to financial difficulties if these issues are not handled appropriately.
Free Consultation with Divorce Lawyer in Utah
If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506