If you have recently gotten divorced from your spouse, the process of filing taxes may feel particularly daunting this year. You probably have some questions relating to filing status, the tax implications of paying or receiving child support, or other topics. To help you navigate the upcoming tax season, we’ve answered some commonly asked questions below. Armed with a bit of information and the expertise of a reliable accounting firm, you’ll breeze through the 2019 tax season.
My spouse and I recently got divorced; which tax filing status should I use?
If you are divorced by December 31st, 2019, you must file your 2019 taxes separately from your former spouse, even if you were married for most of the year. You can choose from two filing statuses: single or head of household, depending on your eligibility.
If your divorce or legal separation was finalized after December 31st, 2019, you must file your 2019 taxes with a status of married filing jointly or married filing separately.
Am I eligible to file as head of household?
The head of household tax filing status has a few advantages over filing as single, including a lower tax rate, a higher standard deduction, and eligibility for certain tax credits.
In order to qualify as head of household, you must have met a number of requirements for the tax year for which you are filing:
You are not considered married on the last day of the tax year. This includes taxpayers who were:
Unmarried during the tax year
Divorced before December 31st
Legally separated with a decree of separation maintenance issued before December 31st; this varies by state law. Check with your tax professional for more information regarding legal separation for tax purposes.
Widowed before the beginning of the tax year and did not remarry before December 31st
You paid at least half the cost of keeping up a home, such as:
Rent
Mortgage interest
Insurance
Property taxes
Utilities
Repairs and maintenance
Other household expenses
You can claim a "qualifying person," such as:
A qualifying child who is single
A qualifying child who is married, if you can claim them as a dependent
Your mother or father, if you can claim them as a dependent
A qualifying relative if they lived with you for more than half of the tax year and you can claim them as a dependent
Does my child count as a “qualifying child?”
To be considered a qualifying child, an individual must meet several requirements.
The person must be related to you as one of the following:
Son
Daughter
Adopted child
Stepchild
Foster child
Brother
Sister
Half brother
Half sister
Step brother
Step sister
A descendant of any of the above (ex. a grandchild, niece, or nephew)
The person can be classified as one of the following:
The individual is under the age of 19 on the last day of the tax year and younger than you.
The individual is a full-time student under the age of 24 on the last day of the tax year and younger than you.
The individual is permanently disabled as of the last day of the tax year, regardless of age.
The person must not have provided more than half of his or her own support for the tax year, including costs such as:
Food
Clothing
Rent
Transportation
Recreation
Medical expenses
The person must have lived with you for more than half of the year, except for temporary absences.
If they are married, the person must not have filed a joint tax return for the tax year (unless the return had no tax liability and was filed to receive a refund).
Note that only one of two divorced spouses can file as head of household based on shared support and care for the same child or children. You can learn more about the head of household filing status at this link.
I don’t have a qualifying child. What other relatives can qualify me as “head of household?”
To be considered a qualifying relative, an individual must meet four requirements:
1. The individual does not meet the requirements to be claimed as a qualifying child by you or anyone else.
2. The person must meet the gross income requirements for the tax year (for 2019, less than $4,200).
3. You must have provided more than half of the individual’s total support during the year.
4. The individual lived with you for the entire tax year as a member of your household (even if they are not actually related to you), OR the individual is related to you in one of the following ways:
Child
Stepchild
Grandchild
Other descendant of one of your children, stepchildren, or foster children
Son-in-law
Daughter-in-law
Brother
Sister
Half Brother
Half Sister
Stepbrother
Stepsister
Brother-in-law
Sister-in-law
Parent
Stepfather
Stepmother
Father-in-Law
Mother-in-Law
Grandparent
Aunt, uncle, niece or nephew, if related by blood
Can I write off child support payments on my tax return?
No, child support costs are not tax deductible.
I receive child support payments from my ex-spouse. Is this considered income for tax purposes?
No, received child support is not considered taxable income.
Can my ex-spouse and I both claim our child as a dependent on our tax returns?
No. Your divorce agreement may specify who is entitled to claim your child as a dependent. If not, the child is typically claimed by the custodial parent. If the custodial parent waives this right, the noncustodial parent can claim the child as a dependent. Some parents trade off taking this exemption each tax year.
Note that the non-custodial parent can never claim the Earned Income Credit (EIC), Head of Household filing status, or the Child and Dependent Care Credit. In addition, only the custodial parent may claim the child as a dependent for the Health Coverage Tax Credit (HCTC).
My ex-spouse will be claiming our child as a dependent. What child-related deductions can I claim?
Although you won’t be able to claim as many deductions as the custodial parent, there are a few strategies to help mitigate your tax liability. By choosing to itemize your deductions rather than taking the standard deduction, you may be able to write off some child-related expenses, such as medical expenses.
Can I write off alimony payments on my tax return?
Payments in accordance with alimony agreements established prior to December 31st, 2018 are deductible for the payer and considered taxable income for the recipient. However, payments made according to alimony agreements put in place after December 31st, 2018 are not tax deductible for the payer or considered taxable income for the recipient.
We hope that this information has been enlightening as you prepare to embark upon the upcoming tax season. For additional guidance to help you make the most of your financial situation, give Seymour & Perry, LLC a call at 706-549-8197.
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