When should I change my tax filing status after divorce?

Going through a divorce can pose many financial challenges. When it comes to filing taxes, couples that have filed jointly will need to separate their finances and report individually to the IRS. However, the year a couple divorces has implications for how they should file their tax return(s).

When should I update my tax filing status?

Once the divorce has been finalized, one or both spouses should submit a W-4 to their employer so that their tax withholding can be updated. This is only required for filers who had filed their taxes jointly during their marriage and subsequently will select a different tax filing status.

Which filing status should I choose?

If before your divorce is finalized, your spouse “didn’t live in their home for the last six months of the [tax] year,” and you “paid more than half the cost of keeping up their home for the year,” and the home “was the main home of a [shared] dependent child for more than half the year,” you may qualify to file as a Head of household.

However, in most cases, the new filer designation will be single.

Are alimony and child support deductible?

In most cases, “alimony or separate maintenance payments” paid to the recipient spouse is tax deductible, meaning it can lower one’s overall tax bill. For the receiver spouse, that income must be reported to the IRS and, depending on the level, and other sources of income may be subject to tax.

Child support, however, is not deductible and cannot be taxed.

Claiming dependents after a divorce

Typically when couples divorce, it is advised that the couple decide who will claim any dependents that are mutually cared for. According to the IRS, “generally, the parent with custody of a child can claim that child on their tax return.” However, if custody is split, then the couple will have to decide who will claim the child, and if unable to do so, the IRS does stipulate a list of tie-breaker rules.