Tackling tax time with divorce

Louisiana residents that have not filed their income taxes yet will have to very soon. Taxes can be complicated for a married couple. However, for individuals who have recently divorced, or are in the process of divorcing, tax time can lend an even bigger headache.

There are a few very basic rules of thumb divorced or divorcing couples can employ to help reduce their tax bill come April.

A person’s tax status this year will center on whether they were married or single in 2012. Anyone who completed a divorce by the end of the year can file as a single person. However, some parents who have children and qualify can file with “head of household” status, which has numerous tax advantages.

Those who are not divorced can file as “married filing jointly” or “married filing separately.” Some would suggest filing jointly is more advantageous.

Parents must keep in mind that child support payments cannot be treated as a deduction. Similarly, child support payments are also not taxed as income. This is a common misstep during tax time.

When it comes to alimony, though, a spouse that receives money to maintain their lifestyle will likely be paying taxes on that money. Those payments can be used as a deduction for the payer, as well.

Spouses that were divorced or legally separated last year might consider using children as an exemption, assuming they qualify. In addition, men and women that served as custodial parents in 2012 might also qualify for specific tax credits.

Divorce attorneys can work with spouses to achieve a favorable outcome during divorce, but men and women might need additional help to navigate areas that can be complicated by divorce. For instance, a tax professional could explain the pitfalls and proper strategy of filing taxes during or after a divorce.

Source: Forbes, “Taxes And Divorce: 6 Tips For Women,” Kerry Hannon, March 7, 2013