(and Answers to Your Other Divorce-related Tax Questions)
There is no question that divorce makes your finances more complicated. Most people only have to account for where every penny came from and where every penny goes during tax season, but when you are newly divorced, this subject is on your mind all the time.
Even worse, it is the business of your former spouse, someone from whom you are trying to disentangle yourself financially and emotionally. Filing your tax return for the first time after your divorce raises a lot of questions.
Is temporary spousal support tax-deductible? How does being a non-custodial parent affect your taxes? Here are answers to some common tax questions related to divorce.Do you have questions about #divorce-related tax issues? We’ve got answers. Click To Tweet
Is Temporary Spousal Support Tax-deductible?
Spousal support, also known as alimony, is money paid by the spouse with the higher income to the spouse with the lower income so that the spouse with the lower income can keep the same standard of living that he or she had during the marriage.
In California, spousal support is tax-deductible to the payor and included as income for the recipient, as long as the spouses file separate tax returns. If you and your spouse file a joint tax return while your divorce is pending, then spousal support is not tax-deductible for that year.
Taxes and the Non-custodial Parent
When your children were born, you probably saw your tax refund increase. What happens after divorce, if the children spend less than half the year with you?
Generally, only one parent can claim a tax credit for the couple’s children. Usually, the parent who has the children with him or her for the greater number of nights during the year is the one who claims them on his or her tax return.
Divorce agreements sometimes contain details about which parent can claim the children for tax purposes. When they do, the divorced couple file and exchange form 8332. It is a good idea to file this form if you are the non-custodial parent (meaning that the children are with you for less than half the year), but you pay a lot of money in child support.
In some cases, both spouses think that they are entitled to claim the children on their tax returns. The IRS will only allow one parent to claim them. The parent who is not entitled to claim the children may file first and claim them anyway. When the second parent, who is entitled to claim them, does so as well, it could eventually trigger an IRS audit further down the road.
Let Denham & Britt Help You and Your Ex-Spouse Reach a Financial Agreement
Denham & Britt, LLP exclusively handles family law cases in San Diego County. We are Certified Family Law Specialists with years of expertise in divorce, child support, child custody, and spousal support.
Contact Denham & Britt to set up a free consultation about your family law case. Talk with attorneys Donna Denham and Jennifer Britt to learn how you can find a peaceful resolution to your family dispute.