A divorce is going to impact many areas of your life, and your taxes are no exception. Your tax situation looks much different as a single individual than it does a married one, and the more you understand about your new tax obligations, the better.
After a divorce, make sure to do the following when filing your taxes.
1. Use the right filing status
Many people navigating divorce mistakenly use the wrong filing status. Whatever your marital status was on Dec. 31 of the year you are paying taxes for should be the marital status you select when filing. If you have children, you may also have to figure out whether you are able to file as head of household, which offers certain tax benefits.
2. Figure out whether you are going to claim dependents
Often, a divorce decree dictates whether you or your former partner claim the child or children you share as dependents. If yours does not, it is often the parent who has the child in his or her care more who may claim the child as a dependent for tax purposes.
3. Review your withholdings and update as needed
If you have a job, this is a good time to review and update your tax withholdings, if need be. Consider taking this step anytime you experience a substantial life change.
Unless the relationship between you and your ex is a highly acrimonious one, it may help to sit down together and discuss who is going to claim the children and other areas of relevance when it comes to your taxes.