Once you and your spouse decide to file for divorce many issues can arise quickly; however, not everyone considers the tax implications of a divorce as one of those major issues. Certain decisions made during the divorce process can ultimately have a massive impact on your taxes. Considerations must be made during discussions about property distribution, spousal support, and more about what is in your best interests now and during tax season. At the Law Offices of David L. Hirschberg, our Boca Raton family attorneys understand the nuances of how certain choices made during your divorce can substantially impact your taxes.
The Timing of Your Divorce
The date that your divorce is finalized can have a big impact on your next tax filing. If the divorce was finalized on or before December 31 of the previous year, you cannot file a joint tax return the following year. However, if the divorce is finalized on January 1 or later, you and your former spouse can still file a joint return, which may benefit you both with significant tax breaks. Even if you cannot, or do not, wish to file a joint tax return you may still be able to file as the head of household if there is a minor child in the family. However, in order to file as the head of household the following must be true:
- On the last day of the calendar year you were considered unmarried, either as single, divorced, or legally separated
- You paid over half of the upkeep costs for the home during the last year, which can include taxes, insurance, repairs, utilities, and food
- You lived with a qualifying dependent for more than six months of the year
It is important to note that filing as the head of household does not automatically mean that you get to claim your child as your dependent on your taxes. Only the custodial parent, or the parent that the child spends more physical time with during the calendar year, is allowed to claim the child as a dependent on their tax return—unless there is a stipulation otherwise.
Spousal & Child Support
Changes made to the federal tax code over the last few years have destroyed the previous benefits of alimony payments in a divorce. Under the old laws, the spouse paying alimony could deduct those payments from their income taxes and the recipient spouse was required to claim them on their taxes. Now, the spouse paying support is no longer allowed to deduct those payments from their federal income taxes. As such, alternative arrangements with property distribution have sometimes replaced alimony in divorce cases. Furthermore, if a child is involved in the divorce the parent paying child support is not allowed to deduct those payments for their taxes, and the parent receiving the payments does not have to claim them.
Contact Us Today for Help
If you would like to speak with a legal professional about the tax implications of your Florida divorce, call or contact the Law Offices of David L. Hirschberg today.