Filing Taxes First Year After A Divorce

So many things change when your marriage ends. Whether you have been married for 25 years or only 25 hours (thanks, Las Vegas!), there are numerous things that change legally as the marriage comes to an end. One of those things is your tax status.

At Family Matters Law Group, we see many clients at the beginning of each year who have questions about how to file their taxes. In this blog, we address some key issues. However, consulting with an attorney or a tax professional can enure you correctly file this year’s tax return.

December 31 Is A Key Date

The biggest question when it comes to taxes is was your divorce finalized by December 31 of the tax year in question. If so, the option to file jointly is no longer available. This is true even if you were married most of the year. Once your divorce is finalized, you’ll have to choose between filing with a status of “single” or “head of household”.

Filing as head of household brings a lower tax burden and some valuable tax credits. However, to file as head of household, you must have qualifying dependents. If you are divorced and are sharing childcare responsibilities with your spouse, only one of you gets to claim “head of household” status.

Children count as qualifying dependents for the custodial parent only, the custodial parent meaning the parent who lives with the children the majority of the time. This designation is part of your divorce settlement. The custodial parent can waive the right to claim the child as a dependent on their taxes. However, it doesn’t change the ability to file as head of household.

Dependent Children And Your Taxes

Dependent children and your taxes

Custodial parents get to claim the children as dependents on their taxes, and custody is determined by the Court. The new tax law in 2017 suspended the dependency exemption. So, why in the world is it important for the custodial parent to keep the children as dependents for tax purposes?

There are still numerous financial perks if you are the custodial parent with dependents.  A main one, ability to claim “head of household” status. With that comes numerous credits, such as:

  • A tax credit for child care expenses
  • A child tax credit (in 2018, this is $2,000 per child)
  • The Earned Income tax credit
  • Tax credits for educational expenses

Alimony And Child Support

When it comes to reporting alimony and child support as income, it once again comes down to the date the divorce was finalized.

If you divorce by December 31, 2018 alimony you pay can be deducted from your taxes. Alimony received should be counted as income. The newly passed tax bill means that from December 31, 2018, onward, alimony paid is not deductible from your taxable income.  Alimony received has to continue to be counted as income.

As for child support, it’s never been tax deductible and it’s never counted towards taxable income. There are no changes in the new tax bill on this count.

orried about filing taxes in the first year after your divorce?  Consulting with an experienced attorney or tax specialist is a good first step. Family Matters Law Group sees many clients with questions about their taxes. If you’re in Henry, Clayton, or Fayette counties, or in the greater metro Atlanta area, contact us if you need help with your post-divorce taxes. We’re ready to hear your story.