Divorce Lawyers Directory Blog

Divorce can complicate many areas of your life, especially if you have young children. One particular area complicated by divorce is the filing of taxes. The increasing complexity of divorce agreements has made determining what each spouse owes the IRS more complicated than ever.

Here are five tips to help recently divorced couples with the filing of their taxes:

1. The calendar year will determine your marriage status. If your divorce was finalized in the 2011 calendar year, you are still considered officially married when filing 2010 taxes. If your divorce was finalized at any point during the 2010 calendar year, you cannot file as a married couple – even if you spent the majority of the year married.
   
2. Paying taxes on the house. If you get the house in the divorce, you may end up owing taxes on it since capital gains taxes apply to the recently divorced. In general, a married couple will not have to pay capital gains taxes on their primary residence if the gain is less than $500,000. However, as a newly single person, that figure will drop to $250,000. Therefore, if you house has appreciated by more than $250,000, you will end up owing taxes on it if you decide to sell it.
   
3. Joint custody doesn't necessarily let you claim the kids as dependants. Child custody arrangements are becoming increasingly complicated as more and more parents are getting creative with these agreements. If you are designated as the custodial parent by court order, you will definitely be able to claim your children as dependents. However, such an order often does not exist. In these cases, the parent who has custody for the majority of time is generally considered the custodial parent. In cases where custody is 50/50, only one parent will be able to claim the same child as a dependent. If you have more than one child, you and your ex-spouse can split the dependency of the children so that you can each receive the tax benefits. If you only have one child, you should consider switching off years so that each of you can receive the tax benefits every other year.
   
4. Spousal support will give you a tax break. In most cases, paying spousal support will reduce your tax liability. However, these payments must be mandated by a written separation or divorce agreement, and they cannot be considered child support.
   
5. No tax break on child support. While spousal support is considered tax deductable, child support is not. This is something to consider when apportioning values for spousal support and child support.