Connecticut couples who may be getting a divorce might be interested in an article discussing some of the effects that splitting up can have on a person’s taxes. They are not all obvious, so the help of an attorney or tax professional may be advisable.
Getting a divorce will change a person’s tax filing status and can have an effect on liability as well. Because of this, the tax aspects need to be considered. For instance, whether paying or receiving alimony, an ex-spouse should be noting this on their tax return. The spouse making the payments is allowed to deduct them from their taxable income, while the other spouse must claim the payments as income and pay taxes on that money. This, however, is applicable only to spousal support payments that have been either ordered or approved by the court. In contrast, child support payments are neither taxable nor deductible.
The change in filing status can have a significant effect on a newly-single person’s taxes as well. When the couple is divorced and no longer filing a joint return, they are no longer liable for taxes on the other’s income. However, a single filing status generally brings a higher tax rate with it. Additionally, some credits that were taken advantage of during marriage may no longer be available. A single person may opt to file as head of household if they are the caretaker of a dependent child.
Contacting an attorney with experience in divorce law may help to clear up some of these and other matters. During the process of the division of assets, there could be more hidden tax issues for the spouse that the attorney can take into account in negotiating an agreement.
Source: Yuma News Now, “How Marriage And Divorce Can Impact Your Taxes“, April 05, 2014