A divorce is probably the biggest headache a married couple in Lakewood could potentially face. A divorce splits apart a family, as well as the assets. One home becomes two. A divorce has financial implications for all involved.
You may have just finalized your divorce and now you have another concern: taxes. This year, tax day is on April 17, so you have just a couple more months to get your return filed with the IRS.
If you think your taxes were difficult in the past, they’ll be even more challenging now that you’re divorced. The date your divorce was finalized, as well as child support, child custody and alimony, will all affect your taxes
While programs such as TurboTax will be able to walk you through the process of filing your taxes after a divorce, you may want to invest in the help of a Lakewood accountant or other financial professional, especially if you are newly divorced. Here are some things to keep in mind throughout the process.
Choose the Right Filing Status
Your marital status on December 31 controls how you file your taxes. If you were not officially divorced by December 31, you have the option to file a joint return or file separately. If you were divorced by that date, you will need to file separately. You can file head of household if you had custody of a child for more than half of the year.
Child Support and Alimony Comes With Taxes
Tax laws regarding child support and alimony can be confusing. Child support is not reported as income and is not deductible to the payer. Conversely, alimony is tax deductible for the payer and is counted as income.
Claiming Children as Exemptions
The exemption for children goes to the custodial parent, unless the divorce decree says otherwise. If you share joint custody, the exemption goes to the parent who had the children for the greater number of days in the year.
Consider Changing Your Tax Withheld
If you are employed, a change in marital status may require you to change your exemptions on the W-4 form. Now that you are single, you may not be having enough money taken out of your paycheck for taxes. This is especially true if you are now receiving alimony or have other tax liabilities. If you owe money this tax season, make some changes to your W-4 so you’re not having to write a huge check to the IRS next April.
Do You Have Questions About Taxes and Divorce? Seek Advice from an Experienced Lakewood Divorce Attorney
A divorce can impact many areas of your life, including finances and taxes. The Lakewood divorce lawyers at Divorce Matters can help you understand what to expect when tax season rolls around, and advise you on other matters involving family law in Colorado. To learn more about what you can expect in your new life after divorce, contact us at (720) 408-7469.