Most Michigan residents know that April 15 is tax day. No one looks forward to tax day and trying to understand a tax code is near impossible for many. Filing taxes for the recently divorced individuals can be even more of a challenge. Divorce in general is an emotionally taxing event for people. Thus, to make tax day simpler for the recently divorced, here are a few tips.
When it comes to one's filing status the options are to file separately, to file married filing jointly or married filing separately. Which option is appropriate depends upon one's divorce status. Thus if a couple had a final divorce order in place before the end of the year, then taxes must be filed separately. End of year is defined as December 31. If, however, one's divorce was not completed by the end of the year and is in progress then the divorcing couple has the option to file either as married filing jointly or married filing separately. It is important to consult with an attorney or tax professional to determine what is best.
Many divorced couples wonder if alimony, also known as spousal support, is taxable income. The answer is yes, alimony is taxable income. The individual receiving alimony will pay taxes and the individual required to pay alimony can deduct alimony payments. However, child support payments if any are a different story.
Child support payments are not taxable income and the individual receiving payments does not have to pay any tax on those monies. Similarly the individual paying child support cannot deduct child support payments. Another related question that frequently comes up relates to which parent can claim a child as a dependent.
Unless otherwise agreed upon by the parties only the custodial parent, the parent with whom the child resides, is the parent who can claim the child or children as dependents. The language in the final divorce decree is important when it comes to this issue. Divorce happens and it can be a taxing time, but working with a family law attorney and discussing such issues can make a difference.
Source: WXIA, "Six tax tips for the newly divorced," Jennifer Leslie, March 20, 2015