It’s tax season once again. It won’t be long before you’ve received all your 1099s, W-2s and other relevant information. That means it’s time to take stock of how your recent separation or divorce will affect your filing status and other important tax concerns.
Here are brief answers to some common questions about filing your taxes during this time:
What filing status can you use?
Your marital status on the last day of 2019 generally determines your filing status for the entire year. However, there are some circumstances where you can file as “head of household” even when your divorce or separation wasn’t final. Keep in mind that the qualifying requirements are very specific, and you need to adhere to the Internal Revenue Service’s (IRS) rules.
If you were still married on Dec. 31 of last year, you have the option of filing as a married couple one more time with your ex-spouse. Before you dismiss the idea outright, consider the fact that the resulting tax break can be significant.
Who claims the children?
Your children are many things – including tax breaks. But parents are often confused or conflicted about this issue because only one parent gets to claim each child. Since this affects both the tax break you get and your entitlement to the Earned Income Tax Credit (EITC), the issue can be complicated if you share custody fairly equally.
Some parents work out a deal to “divide” the kids on a tax return — especially when there are two children close in age. Other parents take turns claiming their children, alternating years. However, before you fill out your tax returns, it’s wise to check your divorce agreement. If your agreement states who will claim the kids on their tax return, you don’t want to violate it.
The smart move is always to take your taxes to a professional for advice, especially when you have questions. If you’re still in the process of divorce, however, it’s not too early to start thinking ahead to your future taxes. Your family law attorney may be able to recommend a good tax professional if you don’t have your own.