Nancy L. Sponseller

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Tax considerations for recently separated couples

On behalf of Law Office of Nancy L. Sponseller posted on Monday, April 14, 2014.

Ohio residents who are recently separated may want to start thinking about how their taxes will be affected by their pending divorce. Parties may not realize that until they get a final divorce or separate maintenance decree, the IRS will still consider them to be married. Therefore, if a divorce is not finalized by the end of the tax year on Dec. 31, separated individuals will still need to list themselves as married for their tax filing status.

Even if a divorce is not finalized, parties may still choose to file their taxes as married filing separately. Using this designation will relieve a spouse from the other’s tax liability, but it will also mean that the spouse’s tax rate is likely to be higher. Additionally, individuals filing separately may not be eligible for the same tax credits as those who are filing jointly. Tax preparation solution programs or family law attorneys may be of use in helping parties determine whether it is in their best interest to file jointly or separately.

Individuals should note that they may deduct any legal fees associated with obtaining tax advice from their taxable income, but they may not deduct any other fees in connection with their divorce. However, if one party is ordered to pay the other spousal support, this amount may be deducted from the payer’s taxes; payments of child support are not tax deductible. A spouse receiving alimony is also required to include this amount in his or her reported income.

Divorcing couples should also make certain that they comply with all technical requirements, such as ensuring that a name change is reflected in both the Social Security Administration’s files and on a tax return. For additional suggestions and considerations that people may want to be aware of when going through a divorce, individuals may consult a family law attorney for guidance.

Source: Yuma News Now, “How Marriage And Divorce Can Impact Your Taxes“, April 05, 2014