It is every family’s wish to stay together for as long as they possibly could, but unfortunately, that is not always the case and some families have to deal with divorce. Divorce should not be taken lightly and handling a divorce can be draining mentally, physically, and spiritually. Yes, there are cases where the two spouses come to an agreement and learn to love again, but when it reaches a point of no return, then the necessary measures have to be taken. And understanding the new financial realities, including how taxes are to be handled, are a part of it. In this article, we will be looking at a few tips for preparing your taxes after a divorce.
- Check the dates
As a general rule, December 31st of every year is what determines how you will be filing your tax returns. What that means is that if you were divorced by 31st December at midnight, you would file your returns separately from your former spouse. Note that if you have primary custody of your children, you probably qualify for head of household status. On the other hand, if you are not, you will file your returns as a single taxpayer even if you were married for the part of the year. However, there are cases where both parents can claim the returns of their children, especially if they have more than one child. For example, if a separated couple had two children, one parent can claim a child on his tax return while the other parent does the same for the other child.
- Gather enough information about your assets
Typically, what happens during a divorce is that the assets get distributed between the two former spouses depending on how the court rules or the couple agrees upon. The mater of asset distribution is normally very crucial, more reason you need to gather all your statements, assets information as well as liability information. This will, in turn, help guide the divorce settlements to ensure everything is equitable.
- Hire a divorce mediator
If you do not have a divorce mediator, it might be time to get one to take you through the whole divorce process. Long Island divorce mediation professionals are among the best at what they do and can help guide you through the divorce process in a fair and steady manner.
- Understand the rules for alimony and child support
If your divorce was already final in 2018, payments for alimony would be tax deductible, but payments for child support are not. It is important to note that child support is not considered as income, but the recipient of alimony must claim it in their tax return for 2018. However, there is a new tax law which begins in 2019 that states that alimony payments are no longer deductible if the divorce occurred after 31st December 2018 meaning that the person receiving alimony will no longer have to claim the alimony as taxable and the person who pays the alimony is no longer allowed to deduct the alimony paid.
If you are not fully aware of the rules governing divorce in general, your divorce attorney mediator will have that covered. Ensure that you hire a professional who knows the ins and outs of the whole process to ensure that you get your lawful rights.