How Your Tax Obligations May Change Upon Finalizing Your Divorce
Those who have begun considering divorce have probably already started thinking about issues like who will retain the family home and how marital assets will be split up. Many, however, fail to consider the impact that a divorce will have on their tax obligations. For instance, a person’s ability to file a joint tax return with his or her spouse ends the same year that the divorce is finalized, regardless of whether the case settled at the beginning or end of the year. This is only one of the many ways that getting divorced affects a person’s tax obligations, so if you and your spouse are thinking about ending your marriage, it is important to speak with an experienced Fort Lauderdale divorce attorney who can ensure that you have a thorough grasp of your new tax situation.
Filing a Joint Tax Return
As previously mentioned, divorced couples are no longer permitted to file a joint tax return. Whether a couple settled their divorce on the first or last of the year, the IRS considers the parties divorced for the entirety of the year when the parties go to submit their returns. This can be a confusing time for recently divorced couples, who may have been filing jointly for years and so were also able to take advantage of a number of tax breaks. These tax breaks may no longer be available once a divorce is finalized, as the parties will need to file their return as single or as a head of household.
Head of Household Filing Status
Filing one’s tax return as head of household has a variety of advantages. For instance, taxpayers who qualify as the head of their household for tax purposes get a higher standard deduction and wider tax brackets than those who file as single and may also qualify for special tax credits. However, only those who meet the following criteria can file as heads of household:
- The taxpayer is unmarried or has lived apart from his or her spouse for at least the last six months of the year;
- The taxpayer paid more than half of the cost of maintaining his or her home for the year, which includes expenses like rent, property taxes, repairs, utilities, and mortgage interest payments; and
- The taxpayer has one or more qualifying dependents who have lived with him or her for at least six months.
If a divorced couple shares a child and one party is considered to be the primary custodial parent, then that individual is usually the only party who can qualify for head of household status. It is possible, however, for couples who share joint legal and physical custody to both qualify as a head of household when filing a return.
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Many individuals qualify as a head of household for tax filing purposes after their divorces are finalized, so if you were recently divorced and have questions about how it could affect your own filing status, please call 954-945-7591 to speak with experienced Fort Lauderdale divorce attorney Sandra Bonfiglio, P.A. about your legal options.