Ending a marriage is complicated in more ways than one. Along with the emotional stress of a divorce, there are also many financial considerations.
How should you file your taxes?
If you’re still legally married by December 31 of a tax year, you should file your taxes as either “married filing jointly” or “married filing separately.” But if your divorce is finalized during the tax year, you can choose to file as single or head of household. Filing as “Married filing separately” can be beneficial if it means you won’t be responsible for your ex-spouse’s tax debts.
Who should claim the kids on their taxes?
If you have joint custody of your children, the IRS allows you to choose which parent can claim the child as a dependent for tax purposes. The custodial parent is usually the one who provides more financial support for the child, but you can discuss this with your ex-spouse and come to an agreement about who can claim the child.
If you can’t agree, the IRS allows the custodial parent to claim the child. However, the non-custodial parent can still receive certain tax benefits, like the Child and Dependent Care Credit.
What happens to your tax refund?
If you filed your taxes jointly with your ex-spouse, you may need to figure out how to split the refund. The easiest way to do this is to have the IRS send each spouse a separate check for their portion of the refund.
You can also direct the IRS to split the refund evenly and have one check sent to each spouse. To do this, you’ll need to fill out the form.
If you’ve gone through a divorce, it’s important to understand how it can affect your taxes. While it can be a complicated process, understanding the basics can help make tax time a little less stressful.