If going through a separation and/or divorce, this tax season may be of more interest to you than it has in previous years. Whether you are separated or divorced, there are several things to consider when determining how to file, what to claim, and which tax deductions may be available to you. If you are filing for the first time without your former spouse, working with an accountant to discuss your options may be beneficial. Below are a few of the items you will need to determine before filing your return.
Which filing status do I choose if I was separated in 2017?
If you have separated in 2017, you have the option to file as Married, Filing Jointly, or Married, Filing Separately. In North Carolina, in order to be separated, one spouse must leave the marital home with the intent to remain separate and apart. Your marital status as of December 31st of each year controls your filing status for that entire year. As such, if you were still married as of December 31st, you have the option of filing a joint return as a married couple or as married filing separately. In addition, there are various tax deductions that may be available to you depending on your individual circumstances. An accountant would be able to assist you with those deductions, including deductions related to the marital residence and your children.
Who claims the kids?
Pursuant to the Internal Revenue Code, the custodial parent has the right to claim the children as dependents for tax purposes. However, the non-custodial parent may be able to claim the children if the custodial parent signs a waiver stating that he or she will not be claiming the children for that tax year. If this is your first time filing after separation or divorce, ask your accountant to explain the dependency child credits, credits for any work related child care expenses, and higher education credits. You’ll need to ensure that you and your former spouse do not have any conflicting information in this area if filing separately.
Do I report alimony payments made in 2017?
It is important to understand how alimony payments are to be reported on tax returns. Knowledge ahead of time can help eliminate any surprise and assist you in budgeting your income. If you are the spouse who is receiving alimony, the IRS considers those payments as income to you and you are required to claim those payments as alimony income on your tax returns. As such, the actual amount you receive from alimony after taxes is typically less than what you receive from your spouse because you will likely need to pay taxes to the IRS upon filing your returns. If there is a valid agreement or order in place, then the spouse paying alimony may claim a tax deduction for all amounts paid in alimony during that given year Note that child support payments are treated differently. The parent paying child support cannot claim the child support payments as a deduction and the recipient parent does not have to report the payments as income.
*The attorneys at Hatcher Law practice in the area of family law and are not tax attorneys or accountants. Please consult with an accountant with any specific questions regarding the tax code or for assistance in preparing tax returns.
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