Despite changing gender roles, a number of wives still let their husbands handle most of the family finances, including taxes. This means that many newly-divorced women are facing the tax season alone for the first time, or at least for the first time in many years. Couple that with the fact that the last year has probably been one of the life changes that will need to be reported on your state and federal taxes, and it’s perfectly reasonable to feel confused and overwhelmed as April 15 grows closer.
Determining your filing status is an essential step. As with most things in involving the Internal Revenue Service, it’s more complicated than it seems. The IRS details the tests for being able to claim one of the unmarried statuses as opposed to filing as Married. If you were considered unmarried, you will either file as Head of Household or Single.
The IRS notes that if you meet the tests for Head of Household, you may pay a lower tax rate than if you file as Single. Besides being unmarried, you must have paid for more than half the cost of a home during the year. A “qualifying person” such as a child must also have lived with you for more than half the year. If you have a dependent parent, however, the parent need not have lived in your home. Some people can file as Head of Household even if they were still married through the end of 2014.
How you and your spouse claim exemptions for your children should be worked out during the divorce. Only one parent can claim exemptions on the children for a given year. Some couples who share custody agree to alternate the years they claim it.
Child custody payments are not taxed as income. Alimony, on the other hand, is. Sometimes, people who receive a significant amount of alimony find themselves owing a lot in taxes at the end of the year. If that’s`the case, it may be best to begin making quarterly tax payments throughout the year to avoid one large bill due on April 15.
In the first year or two after your divorce, it is probably best to seek the help of a tax adviser to help ensure that it’s done correctly. Your Texas family law attorney can likely recommend a tax professional in your area.
Source: Huffington Post, “Women and Taxes: A Guide for 6 Different Scenarios,” Sarah Kaufman, Betterment.com, April. 01, 2015