10 Things You Need to Know About Divorce and Taxes

Tax Tips

Divorce is difficult enough. What could add to the anxiety that divorce brings? Taxes. If you are one of the many people who recently divorced, this year, as a result you will be coping with new tax issues, and may even be filing your own tax return for the first time. Here are ten tips to help you handle tax issues now that you are divorced.

1. Determine your filing status. Your marital status at the end of the year determines how you file your tax return. If you were divorced by midnight on December 31 of the tax year, you will file separately from your former spouse. If you are the custodial parent for your children, you may qualify for the favorable head of household status. If not, then you will file as a single taxpayer, even if you were married for part of the tax year.

2. Consider the tax implications of support. Child support is not deductible to the person who pays it, but alimony is. Likewise, the recipient of alimony must claim it on her tax return, but child support isn’t reported as income. If you rolled your support together into “family support” in your agreement, that makes it fully taxable to the recipient and deductible to the payer, just like alimony.

3. Don’t run afoul of the special rules regarding support. If alimony payments are concentrated in the first year or two after divorce, the IRS may consider the money to be non-deductible property settlement. And if alimony is scheduled to end within six months of a child’s 18th or 21st birthday, the IRS may consider the alimony, in reality, to be disguised child support.

4. Review your divorce decree to see who will claim the children as exemptions. If divorce agreement did not specify who claims the children as exemptions, then the exemption for your kids goes to the custodial parent. If you have joint custody, the exemption goes to the parent who has the child the greatest number of days during the tax year.

5. Get signed Form 8332 if required. If you are entitled to claim the tax exemption for children who spend less than six months of the year living with you, then you will need your ex-spouse to sign IRS Form 8332 (Release of Claim to Exemption for Child of Divorced or Separated Parents). A copy of this form must be filed with your income tax return for you to claim the tax exemptions for children not living with you.

6. File first if exemptions are an issue. If you are entitled to claim the children on your return, but your ex threatens to claim them instead, file early in the year. That way, since you’ve already claimed the children, the IRS will make your ex prove he or she was entitled to the exemption.

7. Claim the child care credit if you are eligible. If you are the custodial parent and you incur work-related child care for children under the age of 13, you may be able to claim a credit for a portion of the cost. Unlike the exemption, which can be assigned using IRS Form 8332, the child care credit is available only to the custodial parent.

8. Review legal fees paid during your divorce. Although most legal fees are not tax-deductible, fees you paid for advice concerning the tax consequences of your divorce can be taken as an itemized deduction on Schedule A of your tax return, as can fees incurred to obtain alimony. Other fees, such as the cost of preparing a new title for your rental property, can be added to the tax basis of your assets.

9. If you are employed, change your withholding on Form W-4. You can claim one additional exemption for every $3,600 or so of deductions, including alimony payments. If you are receiving alimony, consider asking to have extra tax withheld from your paycheck to cover your new tax liability.

10. Make estimated tax payments if withholding isn’t enough. If your withholding won’t be enough to cover your taxes for the coming year, set up quarterly estimated tax payments so that you won’t owe taxes and penalties at the end of the coming year.

Divorce may not be as inevitable as taxes, but it certainly brings complications to tax filing. Follow these ten tips, and the process should go smoothly in the future. Once your divorce questions are answered, TurboTax can handle your tax return.

Comments (105) Leave your comment

  1. I filed my income tax a week before i got a divorce i clamed her and her three kids i had planned on splitting it with her. her student loans took well over half. I filed injured spouse. so i will be receiving it all back. is she intitled to any of it?

  2. Which state do I file state income taxes in? The one I resided in all year or the one where the ex spouse lives. I only have alimony as my source of income.

  3. our divorce became final in May 2014. As part of the divorce decree my husband was ordered to file the joint return taxes for 2013 by August of 2014. As of this date, April 10, 2015, he has not done that, although he did pay estimated quarterly taxes. Each of our two daughters lives with one of us- they are ages 22 and 23, each with a baby. My 2 questions are: 1) Is it allowed for me to claim my one daughter and her baby ( who are living with me and my daughter is not working) as an exemption, while he claims our other daughter and her baby? and 2) Can I file 2014 taxes individually ( as per divorce decree) without having filed anything for 2013?

  4. nt court for separation and have to wait 12 months for divorce to be final if i file taxes with him will it interfer with my 12 months wait i live in sc

  5. If my divorce was finalized in May 2014 and I got one of the 4 properties we’ve owned since 2010.
    Who can claim the state taxes on the property I got? My husband was writing the checks to pay the taxes on our properties but the funds were coming from our joint rental income or our joint HELOC loan.

  6. My husband and I have been separated since May of 2014. He was forced out of the home by an injunction for protection. Our two sons stayed with me and I have temporary custody until litigation is over. I offered for him to still see his sons on his two days off a week. He has paid not a single penny to help support his children. He tried getting me to file jointly and agreed to give me 2/3 of the return. I filed as head of household. I am getting more back by leaving him off of the return. I claimed both of my sons since they lived with me the entire year and for the last 7 months of the year he paid no support whatsoever. He will likely owe the irs since he cannot claim the children on his own return and didn’t have any withholding with his employer. Is he entitled to any of my return?

  7. Hi i have a question if you could answer for me i got divorced last august with two children but we agreed as of 2014 we had stated that we would only claim one child every year two my oldest graduate from high school then when he graduated from school we would spent every other year after that with spenting my youngest can he get in trouble for this i do have documents of this so u are know. Please help.

  8. Hi. I have been separated f(we do not have a legal separation in our community property state) for almost two years. My divorce has taken a long time, we are still in the process (a petition on my part has begun in November and I am already getting child support since Feb 2014). Last tax season (2013), we filed for bankruptcy, and even though we’d been living apart by that point by over six months, we had to do our taxes jointly, and any refund was taken by the bankruptcy. I thought I would be divorced by the end of 2014, so I withheld at a higher rate, but my lawyer is slow. This year, I decided to file as head of household. My ex was supposed to help with child care costs as well, but about 90% of the time, he did not. I am the custodial parent and through the child support, I am able to claim them on my taxes (I make more $ anyway than my spouse). He wanted to do his own taxes badly, so I figured he must be getting something back. He knew he was not supposed to claim the kids or the daycare credit. I had the opportunity through my lawyer to see his W-2’s. He did not withhold enough, and by my estimation, will owe at least $1500 on the federal return (I do my own taxes and I am fairly good at it). I have not seen his taxes and I am sure that he will not show them to me. He claims he owes the state and the person that did his taxes, and will not be getting anything back. I know that he would be screaming bloody murder if he owed $1500 (and he is not). Even though I meet all the qualifications to use the “Head of Household,” I am worried I might be liable if he filled out his tax return in correctly. I think something is fishy. Would I be liable for his incorrect return, or if he did it wrong, will it draw attention to me for an audit?

    S

  9. My wife or soon to be ex wife filed jointly and now just got separated this week. Am I entitled to half the refund? I’m not sure how it works and to be honest I’m still dealing with the emotional part of it and want to make sure what the laws are?

  10. My husband and i have a separation agreement and I’m going to file taxes. Our home was agreed to be mine and now he is asking what he is in tiled to on taxes for the house for the time he lived in it this year he moved out June 1 and I had the house remortgaged on Nov 30. same year what is he in tiled to in that case?

    1. Hi Karen,
      That decision is up to you, but you can split things like mortgage interest and property taxes if you agree to. TurboTax will allow you to properly file your taxes if you split your deductible home expenses.
      Thank you,
      Lisa Greene-Lewis

  11. I was divorced in early October 2014 in Wisconsin (community property state). I was the only income earner during the entire year. The judge said my ex and I were to split the income and taxes paid through the end of Sept. My W2 has my total income and taxes paid. I can pull payroll records to show income and taxes through Sept. How do I and my ex report my income and taxes paid off of one W2?

  12. In the process of going through a Divorce. I was kicked out of the home on April 1st, but continued to pay all the bills for the residence and paid my soon to be ex over $6000 until the end of the year. Around August or September she was awarded temporary custody of the 3 kids. Can I still claim the kids and her, since she does not work and I supported them for most of the year, without court order? She does have court ordered temporary child support and alimony right now, as of September 1st.

  13. as of sept 30, 2014 my divorce was granted. I am the non-custodial parent and work full time. i was granted to claim 2 out of 4 children on my taxes with an opportunity for a buy- out clause. He (the custodial parent) has not worked at all in 2014 so can he claim anything? How does the buy out clause work?

  14. If I was still married to my spouse, and was separated from her in February of 2013, and the electric bill was still in my name where we lived at, and I lived somewhere else, then, how am I suppose to be able to prove that we were separated, if I had no other utility bills in my name, and everything I had sent to me was going to a p.o.box, instead of an address.

  15. I suspected my ex had off shore accounts.Nothing showed up on his tax records,but this was 2009,how could I know if he claimed them later due to the stricter rules regarding taxes and these types of accounts

  16. He asked me for the divorce then moved out took almost the entire house.I want to ask for support.He bought me a car and it breaks down all the time . He has not served me with papers ,The house was mine but I had to give it up I could not pay the bills I only got ss . Living with family .Do I need a attorney ?

  17. My husband name is not on my house we live in and he move out will he be entitle to get a part of my house. I all ready was told if his name not on the mortgage he can’t get anything just asking to make sure thank you

  18. Divorce final 10/2012 we owned an investment property together that has a mortgage I was given the investment in the divorce and my husband was given the marital property we owned. My question is can I claim the rental income, mortgage interest and loss for the property or do I need to split it with my ex-husband. The same on the marital property do we split the mortgage interest or do we just claim properties we were awarded and any write offs for those properties? My ex has been telling me he will file the 2012 tax returns in both our names jointly and has not done it yet and I’m concerned what the reprecussions might be since it is 2014. I filed mine individually for 2013

  19. me and my ex has been divorsed for about 4 yrs and she is remarried. we have joint custody but she has primary. and i pay childsupport and am on dissability. well for the past 6 mths the kids has been stayiing with me cause she and him having problems. but i still pay cs wich she gets and nothing for me to help me while the kdis are here. should i report her to cs services.

  20. i have a question please help me i am never on here so if you can or anyone that knows email me your answer back i would be so greatful please…i am divorce live in chicago IL we have a child together and my question is do we have to give each other a copy of our tax return for proof of income for child support? meaning exchange it?? please help me i need to know the answer on that. thank yuo

  21. I just filed for divorce from my husband. When pulling IRS income forms i found out that he has not filed our income tax since 2010. He files Married, Joint returns. I had no income in 2011 or 2012. I have Social Security income for 2013. Can I file married, single for these years just to clear my name or does this need to be settled during the divorce.
    I want to purchase a home after the divorce and taxes not filed may hamper this process.

  22. If I receive a cash payout of my husbands 403.b retirement funds are they taxable on my end? If so what is the tax rate?

  23. My wife of 16 years decided that she no longer wanted to be married June 2013. Since we lived in a home that her Grandmother purchased for her estate with our 2 minor children she forced me to leave the house. In July or 2013 I moved into a rented apartment. Because I work for the school district I am off during the summer months and my wife had recently gotten a job after being unemployed for 3 years. I took care of the children all summer during the day and sometimes during the nights also. At one point my wife moved our 12 yr old daughter things out on the sidewalk for me to pick up along with my daughter and she lived with me for the next 2 months. No legal papers have been filed as of this date April 2014. My wife has file 2013 income tax as head of household claiming the children and will not provide any of our past tax paperwork for me to use in filing my 2013 taxes. I continue to provide childcare during school vacations and every other weekend. Since she has already filed for 2013 what can I do as far as my filing of taxing also she will not provide me with the childrens ss numbers. Help please she says she already has received the refund and has spent it..

  24. I was divorce by the end of the year. How do i file if both are names are onthe title for the house still and I didn’t live there during the year.

    1. Hi Cheryl,
      If your divorce was final at the end of the year you have to file as single for 2013. If you both pay for your house and are on the title you can split the deduction for the home mortgage interest and property taxes. TurboTax will ask you questions related to your home and make the calculations for you.
      Thank you,
      Lisa Greene-Lewis

      1. Lisa –

        Got divorced this year and am planning for taxes next year. In the settlement, I agreed to alimony on a monthly basis. She is now asking if I can pay it as a lump sump each year for the yearly allocation. Am I allowed to pay ahead of schedule (but only up to the yearly amount) and not have it disallowed by the IRS? Or will I run into issues? Thanks!

      2. Hi,
        It won’t matter for your taxes whether it is paid as a lump sum for the year or monthly. You will still be able to deduct the amount paid for alimony for the year on your taxes.

        Thank you,
        Lisa Greene-Lewis

  25. My x and I divorced a few years ago I have been filing my taxes as a NY state resident, I have been living in Canada for 6 months I don’t work there since I don’t have a work permit. I don’t have any idea how do I file my taxes this year. I’m in the US for a few weeks and I will go back to Canada. What should I do?

  26. Divorced in 2013. I have custody of one child, no child support being paid. I am going to file Head of Household. Problem is ex has the tax records from 2012 and won’t give me a copy of them. I don’t remember if we received a state refund. He does not work so he won’t be filing a tax return for 2013. How can I find out what my liability is for the state refund if there was one? His address was on the state tax form so the 1099G would have gone to him.

  27. I am receiving retirement.In the divorce i agreed to my ex getting half the retirement.She filed QDRO but they only gave her 20%. I have been giving her the half we agreed upon in the divorce decree. Do i add the difference i have been paying her to the alimony i am paying her on my taxes.

  28. Divorced last year. I have just received a bank 1099 form from a closed custodian account. It has our son name and with his social number on it. Since the statement was sent to me, I would like to file it. Can I file it as part of my other 1099 forms together even it has his name on it? Note that I am going to claim him as my dependent because he lived with me more than 6 months last year. Please help

  29. My divorce became final on Nov 1st, 2013, my ex-wife and I have no children but we did own a home which we sold. We are just beginning to receive the tax documents for interested paid etc, how does that get divided since we have to file separate?

  30. My divorced was final in April 2013. My name is on the parent plus loan for my 22 year old daughter. My ex pays 42% of the loan and I pay 58%. Can we both claim the loan on our taxes since we both have a part in repaying?

  31. My husband has been incarcerated o and of for years. We filed for divorce several years ago but never followed up on it. However, I filed my taxes once or twice as Single/Divorced. I never knew that I could get a tax break if I filed a joint return. We were married in 2001 and I’ve only filed taxes twice since then. (I didn’t make enough to have to file) What kind of trouble would I get into if we were to file jointly this year. Will I be in trouble for claiming I was single last year?

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