What are the Tax Implications when You File for Divorce? Tips to Help
If you’re going through a separation or a divorce, you should know about the tax implications. Consider these five tips.
1. Decide who gets child support deductions.
Alimony is tax deductible for the person paying it. It’s taxable income for the alimony recipient. Child support isn’t taxable income for the spouse receiving it, and it’s not deductible for the person who pays it.
2. Know how to qualify for a tax exemption.
The spouse who has physical custody of a child for at least half the year can claim it, if, among other requirements, the parents are divorced, separated or living apart for at least the final six months of the tax year.
3. Know if you will file as head of household.
Only the parent who has physical custody of the child for more than half the time is eligible for this filing.
4. Know about child care tax credits.
Only the custodial parent can claim this credit.
5. Get more information.
The IRS has many publications for couples going through a separation or divorce. Search their website for the appropriate forms and advice.
