Extremely Useful Information When Filing Taxes for Divorcees
Latrice Knighton is a member of the Sterling Law Offices partner team and an award-winning divorce attorney, life coach, and speaker. She helps clients resolve their problems by using legal techniques and smart tactics learned through decades of experience as well as helping clients by offering the best practical advice.
Filing for taxes can be challenging enough without family troubles in the mix. That's why it's important to understand when to ask questions when they start to arise in regards to both alimony and child support. There are many people around that would be able to assist such as an accountant, attorney, or a tax advisor. It's also important to know who to ask as certain questions will be better suited to a specific field of work.
Should I speak to any particular person before filing my taxes?
Before taking any action in respect to your income tax, you should review your situation with you accountant (CPA) and attorney.
Who is responsible for the tax amount on a joint income tax?
If both you and your spouse sign a joint income tax return, both of you can be held responsible for the whole amount of the tax due. If separated from your spouse, talk to your attorney before signing or filing a joint return.
What should I do if I can't access past joint tax returns?
If there is trouble securing past joint tax returns, you’re able to get them directly from the IRS by filling out the International Revenue Service Form 4506.
What must be changed if I move out of my previous residence?
Notify the IRS any time you change your mailing address by filing out the IRS form 8822. It is advised to not do this without consulting your tax advisor as there may be extenuating circumstances.
How does alimony effect my taxes?
Spousal support (alimony) is taxable to the recipient spouse if all the requirements of IRS Section 71 are met. It is deductible from the person who pays it if the requirements of IRS Section 215 are met.
How does deductibility work and influence my taxes?
Your tax advisor can help you understand the technical requirements imposed by the IRS about deductibility of spousal support. Child support payments are not deductible from the income of the payor spouse or taxable to the recipient spouse according to IRC Section 71(A) and IRC Section 215.
Who claims dependency on the income tax form?
The primary placement parent claims the dependency exemption for the minor children on their income tax return. However, the primary placement part may fill out IRS Form 8332 which would release the dependency exemption to the non-primary placement parent.
How do financial assets such as property play a role in my tax return? What happens if we sell the house?
Transfer of property is not a taxable event, but there may be circumstances where consulting a tax advisor is recommended.
You must know the basis of the property that you receive in the division of your assets. The basis is usually the cost of acquisition of a capital asset. If the asset has appreciated, the person who receives it will be responsible for tax on the appreciation when the asset is sold.
When you and your spouse sell your jointly owned residence, both people will be responsible for reporting half of the gain. To defer the gain, each spouse must purchase a new residence within two years that costs at least half the sales price of the whole residence.
Who qualifies to be the head of the household for tax filing?
A person qualifies as head of household for tax filing returns if they provide more than half the costs of a home for themselves and a child or other dependent.
References: International Revenue Service Form 4506