Divorce & Taxes

Divorce & Taxes

goatHere are some key issues that may affect you if dealing with divorce or separation:

Alimony received must be included as taxable income

Alimony paid is a deduction for the person paying it

Child support is not a taxable event

Let the IRS know about your address change on Form 8822

Report any name change

When filing your tax return, your status is whatever status you are on December 31st of the tax year.  You are either Single or Head of Household if you got divorced at any time during the year.

Your spouse may have been given all or a portion of your retirement account

If you received a distribution from your spouse’s retirement account you should have received, and included on your tax return, a form 1099-R for the distribution.

Be sure mortgage interest, real estate taxes, charitable contributions, etc are only deducted by one person

You can claim medical expenses paid for someone who was your dependent either at the time the expense was incurred or at the time it was paid

You CANNOT deduct contributions to a former spouse’s Traditional IRA

Also, remember to change your beneficiaries on your retirement plans, bank accounts, wills, etc. if needed.

Higher Education costs:   Click HERE for Publication 970 IRS info (Who can claim a dependent’s expenses section)

If you can claim the child as your dependent AND YOU PAID the qualified educational costs then you CAN claim the expenses for education credits.

If the student paid them or if you paid them but can’t claim the exemption for the student then you CANNOT claim the education expenses.

If you paid educational expenses directly to the school as a condition of the divorce decree but can’t claim the child’s exemption on the tax return then the payment is treated as paid by the student and only the student can claim the educations costs. In this case no one takes the child’s exemption, including that child, on their tax return.

More info on Divorce & Taxes:

IRS Summertime Tax Tip on Divorce

Publication 504: Divorced or Separated Individuals

Linda Reinhardt

Comments are closed.