People in Florida who are considering divorce may be especially concerned about the financial burdens divorce can bring alongside the emotional and practical consequences. From the division of assets to potential spousal support, divorce can be a major change to the financial status of both parties in the end of a marriage. Aside from the major factors like separating retirement funds and making one household into two, the other financial concerns that can come with divorce include taxation.
Divorce changes a taxpayer’s filing status from married to single. In any given year, if the divorce decree is finalized before Dec. 31, the change must be reflected on tax returns filed for that tax year. Those filings are due before April 15 of the following year. However, if the divorce is not yet finalized, even if it is pending and papers are filed, the parties should continue to file either jointly or separately as married for that year.
Another issue that can arise in regards to taxes after divorce is how to handle tax credits for children. Parents receive a tax exemption for each dependent child, but this can be claimed by only one parent. The parent who has the largest amount of custody or parenting time is assumed to have the credit by default, but that parent can choose to sign a waiver allowing the other to claim the credit.
There are other more complicated issues regarding divorce and taxes that can come up as part of the process, including spousal support taxation concerns and the potential for taxes on the sale or division of assets in the divorce. A family law attorney may help provide answers for handling tax issues as well as advocacy and representation for a divorcing spouse on all matters including child custody, asset division and spousal support.
