A marriage is a contractual agreement that has financial implications. When a marriage ends, it impacts the finances of both parties– this includes taxes. There are some changes that you should be familiar with when you divorce. The options available to you during your divorce are different from those after your divorce, and it is necessary to make the distinction.
Your Tax Filing Status Might Change
One of the most critical steps in filing your taxes is choosing a status. Your tax filing status informs potential deductions and costs. You must accurately select a tax filing status that also benefits you.
Individuals undergoing the divorce process who are not legally divorced before the end of the year have the choice of filing a joint return or married filing separately. If you are not legally separated on Dec. 31, you must file jointly or married filing separately.
Each filing status has different deduction thresholds and requirements for filing. In 2022, the standard deduction for married couples filing jointly is $25,900. For single taxpayers and married individuals filing separately, the tax deduction is $12,950. The standard deduction is $19,400 for heads of households.
If you want the tax benefits of filing as Head of Household, you must meet the following requirements:
- File a separate tax return from your ex-spouse
- You pay more than half the cost of maintaining your house for the tax year
- Live more than half the year with a dependent child
One Parent Can Claim Children
After a divorce, only one parent can claim children as dependents. The person who can claim a child as a dependent is the custodial parent. The custodial parent is often listed in the divorce agreement and is the parent who has the child more during the year.
Alimony and Child Support Taxes
Child support is neither tax-deductible nor considered part of the income. Alimony you pay for divorces finalized after Dec. 31, 2018, cannot be deducted from taxes. If you receive alimony you do not need to include payments in your taxable income.
Deducting Legal Fees
Generally speaking, litigation, counseling, and other services obtained during a divorce are not tax-deductible. Questions about filing taxes in Nevada before and after divorce are complicated. Contact our team at Naimi & Cerceo Family Law for a confidential consultation.