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5 tax tips for divorcing and divorced Phoenix residents

Tax season has arrived. While filing taxes is a complicated process for a number of Arizona residents, it can be extra challenging for recently divorced taxpayers, as well as those in the midst of divorce.

Those who have specific questions about their taxes may benefit from talking to their attorneys and/or their tax accountants, but there are a few general tax tips that can help divorced and divorcing couples get started on their filings.

  1. In the eyes of the IRS, your marital status as of Dec. 31 is official for tax-purposes. People who were divorced as of Dec. 31 are no longer eligible to file a joint return, and they should select single or head of household status. Those who were not yet divorced on the last day of the year may select the "married filing jointly" or the "married filing separately" status.
  2. A child can only be claimed on a single tax return. Generally, the custodial parent claims this exemption, but there are some exceptions.
  3. Child support is not deductible and it is not taxed as income.
  4. Alimony can be reported as a deduction by the person who is paying it; and it should be reported as income by the person who receives it.
  5. Communication is key. Few people enjoy having lengthy discussions with their ex-spouses, but it can be important to have a talk before filing taxes. When divorced couples make mistakes reporting and deducting alimony - if, say, the numbers do not match up - both parties may end up being audited. Significant problems can also arise if both parents claim exemptions for the same child, a home or medical expenses, unbeknownst to each other.

It might be possible for some divorcing couples to come to agreements about tax issues - such as who will claim what - during the divorce process. This way, these questions will not have to be discussed year after year, although it still might be wise for ex-spouses to check in with each other to ensure they are on the same page at tax time.

Source: Pittsburgh Post-Gazette, "Communication key for estranged couples during tax time," Jan. 9, 2014

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Law Offices of Matthew S. Schultz

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