Though no one would disagree that tax time is a rough period regardless of your marital status, things become a lot more complicated if you are preparing for or are in the midst of an Ohio divorce. Nobody wants to deal with the expenses associated with tax time while paying for divorce lawyers, so it’s critical to avoid unnecessarily wasted money by following some important tax season advice.
First off, for those who are in the midst of divorce it is critically important to choose the right federal tax filing status. This can be tricky given that many people may not realize how to determine their status for the prior year. In reality, it’s pretty simple. Your filing status is decided by whether or not you were married on the last day of the previous year. That means if you were married on New Year’s Eve then you can file married and jointly. If you were solo already and your divorce was final, then you file your taxes as a single person.
The next thing that those going through a divorce need to be sure and do is claim all allowable tax exemptions. The biggie here is your child tax credit. The caveat is that only one spouse can claim the credit and only if certain conditions are met. Custodial parents are also allowed to take childcare tax credits as well as education tax credits for their dependent children. However, the child tax exemption can only be claimed by the custodial parent. The only possible exception to this rule is if the two parents agreed in advance that the noncustodial parent would take the exemption. If so, both parents must fill out the IRS Form 8332 to ensure that the exemption is transferred to the noncustodial parent.
Though everyone wants to get as many tax breaks as possible, it’s important to make clear that some things cannot be deducted. For instance, if you are paying child support in Ohio you are not permitted to deduct this from your tax bill. By the same token, those receiving child support payments can breathe easy knowing they do not have to include child support money as income.
Thankfully (depending on who you are), the same rules don’t apply to alimony or spousal support payments. For spousal support, those who pay the money can deduct it from their taxable income. On the other hand, the other spouse will have to claim alimony as income on his or her tax return.
Tax rules are tricky by themselves but can become downright overwhelming in the context of a stressful divorce. If you find yourself facing the prospect of complicated divorce and have questions about your rights and options, contact an experienced Ohio family law attorney who can help guide you through the difficult process. Count on the expertise of Twinsburg family law attorney Carol L. Stephan.
Source: “Divorce and Taxes: Five Things You Need to Know,” by Kelly Phillips Erb, published at Time.com.
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