As income tax day nears, those in the divorce process, or those who have recently finalized a divorce, will likely have questions about what changes must be made to their tax returns this year.
Your marital status as of December 31 of the tax year determines your filing status for the whole year. Said another way, the tax year in which your divorce decree is final is the year you can file as single.
If you were in the divorce process as of December 31, 2016, you have two options for filing status. First, you could decide to file a joint return. Second, you could decide to file married, filing separately.
Head of Household
Many people prefer to file as “head of household” because you typically get a higher standard deduction, a lower tax rate and, most importantly, a larger refund. To qualify for head of household you must:
- Have paid at least half of your home’s maintenance costs for the tax year;
- Be “considered unmarried” for the tax year;
- Be a primary residential parent, which means that a child has lived with you for more than half of the year. If a couple has more than one child, each parent could claim head of household so long as one child lived with each parent for more than half a year; and
- Not file a joint return.
You are “considered unmarried” if you have never been married, are divorced or legally separated, or lived apart from your spouse for the final six months of the tax year.
The parent who has lived with the child for the longer period of time that tax year typically is able to claim the child as a dependent. However, sometimes spouses agree to a different arrangement. If this is the case, you must follow the agreement.
If you claim a child as dependent, you usually are able to take certain tax credits such as the higher education credit. The primary residential parent can also claim the childcare credit.
Contact a Skokie Family Law Attorney
Taxes may be a challenge for you the year or two after separation. The experienced family law attorneys at Weiss-Kunz & Oliver, LLC have helped many families determine equitable tax solutions. Tax implications are always something we keep in mind while we negotiate on your behalf. To contact an Elmhurst, IL divorce lawyer, call Weiss-Kunz & Oliver, LLC today at 312-605-4041.