• Divorce is a difficult time for all involved, and while you may not be thinking immediately about how your divorce will impact your taxes, it’s important to understand it will. A professional family law attorney in Edwardsville, IL, can give you good advice. Here are 10 things you need to understand about divorce and taxes.

    Know Your Filing Status

    Whether you claim a married or single status depends on your legal marriage status when filing taxes. If you were divorced from your spouse by December 31, then you’ll file separately. If you’re still in the process of negotiating the divorce by that point, or if you’re waiting for it to be finalized, you’re considered married and you’ll still file jointly.

    How Child Support Impacts Taxes

    If you’re responsible for paying child support, you cannot deduct those expenses from your taxes. If you receive child support, you won’t have to claim it as income. If alimony and child support are rolled together into a family support payment, however, it is considered income and must be reported by the recipient on their taxes. If you pay family support, though, you still can’t deduct that.

    Special Rules About Alimony

    Alimony rules changed under the 2018 tax reform. If you divorced in 2018 or earlier, you can deduct alimony from your taxes if you have to pay it. If you receive alimony and you divorced before 2018, then you must claim it as income. However, for those divorcing in 2019 or later, the rules changed. Alimony isn’t a deductible expense and you don’t have to claim it as income.

    However, if your alimony settlement is concentrated in the first couple of years following the divorce, the IRS may consider these payments a non-deductible property settlement.

    Head of Household Status

    If you have primary custody of a child or children, you should claim Head of Household. This status gives a higher standard deduction than claiming single. The deduction for Head of Household is $18,000, versus $12,000 as the standard deduction for single filing status. However, you must provide the majority of support for the dependants.

    Who Claims the Children?

    Your family law attorney can help you write in who will claim the children as dependents in your divorce decree. This gives you legal standing to claim the children. If the decree doesn’t determine who gets to claim the children, then the custodial parent is entitled to claim them. If you have joint custody, then the person who has the children the greatest number of days each year gets to claim them.

    Change Your Withholding

    Once you’ve divorced, consider changing your withholding at work. You can use an online calculator to determine what your withholding should be, or if you aren’t the custodial parent, you may need to adjust the number of exemptions on your W2.

    File Early If You Can Claim Your Child

    If your divorce was acrimonious, or if your ex-spouse is threatening to claim the children on their taxes, you may wish to file as early as possible to prohibit this. If your ex does try to claim the children, the IRS will make them prove that they are entitled to do so.

    Claim the Child and Dependent Care Credit

    If you are the custodial parent, or if you have primary custody, you may be eligible for the Child and Dependent Care Credit. If you have work-related child care expenses, such as an after school daycare program or a nanny, you may be able to deduct some of these expenses. This credit gives you a deduction of $1,050 for one child and $2,100 for two or more children.

    Divorce Costs Aren’t Deductible

    The costs of a divorce can be expensive, and you may be wondering if you can deduct the expenses from your taxes. However, legal fees have never been tax-deductible. Alimony proceedings used to be an itemized deduction, but it’s been removed under the new tax reforms. If you’ve previously deducted alimony proceedings from your taxes, you won’t be able to any more. When the 2025 tax reform happens, however, this may change, so it’s always good to understand your status.

    Property Taxes

    If you keep the house in the divorce settlement, you’ll also be responsible for paying the property taxes on it. You won’t be taxed on property transfer, however, as the IRS declares that property transfers as a result of a divorce are exempt from taxation. If you choose to sell the house, however, you may be subject to capital gains taxes, especially if the value of your home has substantially increased. A good attorney can help you determine when a good time to sell the house would be.

    Contact an Attorney Today

    Divorce can be difficult, but an expert in Edwardsville, IL, can help you with the process from filing to finalization.