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Divorce and taxes

It’s that time of year again in Illinois when the breeze carries the sweet scent of spring and everyone begins looking forward to warmer days to come. It’s also that time of year when taxes are on most people’s minds, no matter if they filed on time or not. For all of those that are considering divorce or are in the midst of dissolving their marriage, it’s important to understand how this type of life change affects people during tax season.

How to file

First off, it’s helpful to know that your filing status depends on your marital status that year. For instance, anyone that divorced at some point during 2013 can file their taxes for that year as being single. And for divorcing couples that live apart but choose to file together, the option of claiming the head-of-household deduction is feasible in some cases. However, the individual claiming the deduction must be the primary provider for the household and the couple must have lived apart for at least six months.

Figuring support payments into the tax equation

Many people are surprised to learn that child support payments are neither taxable nor tax-deductible. Alimony, however, is another story. The individual paying alimony has the opportunity to deduct it and the individual receiving it is obligated to pay taxes on that money.

How to claim dependents

For divorced families with children, parents are required to submit a specific IRS form identifying the dependents they wish to claim. In most cases, the dependent must live with the parent applying for the deduction for more than six months of the year and be 18 years old or younger. And in cases where the non-custodial parent is applying for the deduction, the custodial parent must also consent.

Source: Reuters, “What’s even worse than a divorce? For some, it’s the taxes,” Lauren Young, April 10, 2014

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