Divorce and taxes can be two stressful situations to deal with and most couples are unsure how to complete their taxes once their divorce is finalized.
The good news is when you and your spouse opt for a divorce through a collaborative process, you are supported by a team of experts, one of which is a financial neutral who can help you wade through and weigh out the financial changes that will occur, including your tax liability after your divorce has been finalized.
Typical child expenses that concern divorcing parents include the following:
- Whomever your child lives with the most in the tax year, the parent will be able to claim the child deductions for that tax year and head of household
- Remember to consider the special child care tax credit implemented in 2021
- Each spouse needs to file a W-4 with their employer to adjust what is being withheld for both state and federal taxes
- If your divorce was finalized on or before December 31, 2021, the divorced couple would no longer file as married
- If your divorce was not finalized in 2021, you may still file jointly or married filing separately
- Divorces filed after 2018 cannot deduct alimony
- Whoever is paying for your child’s medical expenses can deduct them
Division of some of these expenses is often added to child support, while some are usually considered covered by child support.
Our financial neutral will consider all incomes, assets, and debts, then create a plan that could be beneficial to both of you while considering the tax implications your divorce will trigger.
A Better DivorceTM is an interdisciplinary group of professionals who are committed to non-court, non-confrontational solutions for family law matters.
Note: This information is general in nature and should not be construed as legal/financial/tax/or mental health advice. You should work with your attorney, financial, mental health or tax professional to determine what will work best for your situation.