Going Through Divorce and How It Affects Your Tax Return Filing

If you are going through a divorce, then you know how stressful it can be to all parties involved. Do you know how a divorce will affect your tax return? Follow a few guidelines to ensure that you don’t make common mistakes when filing your tax return. If your divorce was final in the previous year, then you’ll need to change your filing status. Seek the assistance of a good attorney or accountant before filling out your tax return.

Choose The Right Filing Status

If you have custody of dependent children, then you’ll need to file as the head of household. This will give you several tax advantages that will save you money. Check web page if you are considering hiring a child custody attorney. If you don’t have dependent children, then you will file as a single parent. There may also be alimony issues, which require the services of a good tax attorney. Tax laws change frequently, and mistakes are made when you don’t understand the law.

Money Issues

A divorce is hard on a family who is used to two incomes. Learning how to live on one income can be extremely challenging. The best way to deal with living on half the income is to set up a good budget. A budget is a road map that keeps your spending on track. The main reason people overspend is because they aren’t aware of their finances and not keeping track of where all the money is going. Write down all your incoming and outgoing expenses. If there isn’t enough money to cover your outgoing expenses, you may need to seek additional employment or cut back on spending.

Tax Tips

If you’re currently going through a divorce, then this is the time to plan for your upcoming taxes. Your attorney can advise you on the best way to divide your assets. Make sure you have contacted your divorce attorney and that the divorce decree states who gets to take the child income tax deduction. If one or both of you have retirement accounts, then it’s important that you seek a qualified attorney for assistance. Once the divorce is final, it’s too late to change important tax information.

The amount of money that is paid for child support is not taxed. Negotiate property and assets before the divorce is final. You must carefully think about future costs for the children such as college tuition. Ask your attorney about the difference between child support and alimony. You may or may not be entitled to alimony. There are also deductions such as child care credits that need to be resolved.

The government has a lot of helpful information on their website. However, it shouldn’t be substituted for a qualified attorney. Tax laws are difficult to comprehend, and if you make a mistake, it can cost you a lot of money on taxes. If you have a child that is physically or mentally handicapped, then ask your attorney for advice. Even if you don’t have dependent children, you need to know about possible exemptions that can save you a lot of money.

A divorce is a difficult time even if everything goes smoothly. Seek the advice of  a tax attorney for peace of mind. Tax laws may also change from state to state regarding divorce, child support and alimony. It’s important that you make good financial decisions for your future. A qualified attorney will walk you through the steps needed to file your tax return. Choose an attorney that has a lot of experience with taxes and divorce.