Advice For Those Divorced In The Last Year As Tax Day Approaches

With April 15 fast approaching, those who have gone through a Tennessee divorce will likely experience a somewhat different tax filing process this year, and the IRS does not Divorce Taxesprovide a “recently divorced exemption.” A Gannett Company Atlanta affiliate posted an article this month offering tax tips for newly divorced couples, the following is a synopsis of their advice.

Filing Status

Determining your filing status is the most logical starting point. Though you may think it’s clear, the reality is that under some circumstances, you may have a choice of how to file. If your divorce was finalized before the end of the previous year (by December 31, 2014), then you have to file separately. If not, you may have some other options. You can choose to file married filing separately or a standard joint tax return. There can be advantages and disadvantages of both, so consult your CPA and weigh your options carefully.

Alimony and Child Support

First, child support is not viewed as taxable income. This means the person paying the child support does not get to deduct it from his or her taxes and the person receiving it does not have to report the money as income. However, alimony is usually a different story. Unless the order setting forth the alimony amount specifically says otherwise, the person paying alimony is able to deduct this from his or her overall taxable income, while the recipient will need to report the money to the IRS and be prepared to pay the appropriate taxes on it.

Child Tax Credit

It is important to understand that only one person has the right to a child tax credit. Typically, the person who gets the credit is the primary custodian, though this is not always the case, as parents can craft agreements amongst themselves that give the benefit of the credit to the other parent.

Mortgage Interest Deduction

Another valuable tax credit is the mortgage interest deduction. Generally, if one spouse receives the home and is required to make the mortgage payments on it, that spouse will be allowed to solely claim the deduction. However, certain other situations could result in each spouse claiming a share of it, and this can vary from case to case, depending on the specific facts of each case.

It would be in your best interest to contact an experienced divorce lawyer as well a certified public accontant if you have been recently divorced and have questions about filing your taxes. Attorney Donna Wagner can assist you with your family law needs, contact her office for a consultation.

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