Going through a divorce is a huge life change, and it impacts almost every area of your life, including your taxes. You’re not alone if you feel overwhelmed by your new tax situation on top of the changes to your personal life.
The best thing you can do is take it one step at a time.
While your tax situation will vary, there are several steps that everyone will need to take when filing their taxes after a divorce.
Update Your Personal Information With the IRS
If you’re changing your name or address, you must inform the IRS of this change.
To update your address, you must fill out IRS Form 8822. You can complete this form in several different ways.
You can use your new address when filing your taxes, provide a written statement to the IRS, or notify them in person or by phone. You will need to provide your old and new addresses as well as your social security number.
If you change your name, you must file your tax return with the name on record with the Social Security Administration. You must notify the Social Security Administration of your name change before you file.
Confirm Your Filing Status
Depending on when your divorce was finalized, you may need to change your filing status this year.
If your divorce was completed on or before December 31, you are not able to file a joint return. You must file as single unless you are eligible to file as head of household or remarry by the end of the year.
To file as head of household, either you or your ex-spouse can claim this filing status if all requirements are met:
Your spouse didn’t live in your home for the last 6 months of the year
You paid more than half the cost of keeping up your home for the year
Your home was the main home of your dependent child for more than half the year
If you remarry by the end of the year, you are able to file as married filing jointly or married filing separately.
For divorces finalized after December 31, the IRS still considers you married for filing purposes. This means you can file a joint return for the previous year, making you eligible for a higher standard deduction by combining incomes with your spouse.
However, if you do not wish to file a return with your spouse, you are able to file as married filing separately.
Update Your W-4
The choice you make for your filing status will impact how you complete your W-4.
When you know which filing status you want, let your employer know as quickly as possible so the correct amount is withheld from your paycheck.
Alimony, Claiming Dependents, and Child Support
If you have dependent children or alimony as part of your divorce proceedings, your taxes may be more complicated.
The tax implications of alimony vary depending on when you got divorced. For divorces finalized before December 31, paid alimony can be deducted from your tax return. Received alimony is also considered taxable income.
If your divorce was settled after January 1, you are not able to deduct paid alimony, nor do you count received alimony as taxable income.
Dependent children will also heavily impact your taxes. After your divorce, only one parent is able to claim their children as dependents on their tax return. Typically, this person is the custodial parent, meaning the parent the child lives with for most of the year.
If you have shared custody, the parent with a higher adjusted gross income usually claims them as dependent. However, you may both be able to claim them as dependents if you both agree to it.
Filing Your Taxes After the Divorce
It’s ok to feel overwhelmed by your new situation. And the good news is that you don’t have to do everything on your own.
At AMG Finance, our tax preparation services can help you prepare your taxes no matter what your situation looks like.
Our friendly team will help you maximize your return any time of the year. Learn more about our tax preparation services or find an AMG Finance branch near you to get started.
