Will your divorce have an impact when you file your taxes?

On Behalf of | Feb 1, 2022 | Tax Law

You will have to adjust to some pretty big changes as you move on with your independent life after a divorce. Your living situation and budget will probably change. Your daily schedule will likely change too, especially if you have a shared custody arrangement with your ex. 

In addition to a different amount of income and different financial responsibilities, your tax obligations will likely change after the finalization of your divorce. What is different when it comes to your income tax filings after your divorce? 

You can file as the head of your household

There is one significant tax benefit to divorce, and that is the ability to file your taxes as the head of your own household. You can potentially reduce your personal tax liability by filing as the head of your household, but it’s important to know that you can only do this starting the year after the courts finalize your divorce. 

You may or may not be able to claim your children

Married couples report their children on their joint tax returns, making it a simple process to obtain child tax credits. After divorce, only one parent can claim the children for tax purposes. 

Your parenting plan will likely discuss which parent can claim the children. Often it is the parent with more parenting time, but sometimes income and tax liabilities will motivate a couple to let the higher-earning parent claim the children instead. Some parents even alternate years to make the situation as fair as possible. 

Understanding how your recent divorce will affect your tax obligation to help you avoid making potentially expensive mistakes and handle the details of shared custody properly during your divorce.