If you are divorcing in Georgia, tax implications may not be on your radar. However, the specifics of filing taxes after divorce—and how your divorce decree reflects those specifics—could have significant implications. Dates are also important, as the filing status you and your ex will use will depend on the date your divorce becomes final.
If you finalize your divorce on or before December 31st, you may still file a joint tax return. If you do not complete your divorce until after the new year, the IRS considers you married when filing the prior year’s taxes. You can choose the “married, filing separately” status when filing your taxes.
While you may want nothing more than to be free from your ex in every single way, filing a joint tax return could be your best option. You will receive a higher standard deduction when you combine your income with your spouse’s income. If you are unable to file a joint return, you may choose to file as “head of household,” although only one of you can file as head of household and must consider the following:
- To file as head of household, you must have been considered divorced or legally separated to file as head of household.
- You must have paid more than half of the costs of keeping up your home during the year, including utilities, home insurance costs, real estate taxes, repairs, and even groceries.
- You must have lived with a qualifying dependent—such as your child—for more than six months of the year.
Filing as head of household can get you some tax breaks, but either you and your spouse will have to agree on who is eligible to file as head of household, or your divorce decree must address this issue. If you choose to file your taxes as married and expect a tax refund, make sure your divorce decree stipulates which spouse will receive the refund.
What You Need to Remember About Taxes Following Your Atlanta Divorce
How you will file your tax returns following your divorce is not the only thing you need to consider. Following your divorce, you must remember to fill out a new W-4 at your place of employment. A W-4 is the form that tells your employer how much money to withhold from your paycheck. You must recalculate or adjust your W-4 to reflect deductions if your spouse has primary custody of your child or to reflect your new status as single or head of household.
Is Alimony and Child Support Taxable?
For divorces or separations finalized before January 1, 2019, alimony is tax-deductible for the person paying it, and the person receiving it must report alimony payments as income. Divorces and separations finalized after January 1, 2019, changed due to the Tax Cuts and Jobs Act of 2017. Now, the person paying alimony may not deduct the amounts on their taxes, and the person receiving alimony is not required to report the amount on their taxes. Child support payments are neither deductible for the parent paying the child support nor taxable to the parent receiving child support.
Can I Claim My Children as Dependents?
The parent who can claim a child as a dependent is the custodial parent—the parent the child lives with for more nights during the tax year. Divorce agreements typically name the custodial parent. This parent can claim earned income credit, file as head of household, and receive the child and dependent care credit.
As the noncustodial parent, you cannot claim the EITC or the child and dependent care credit and cannot file as head of household. You may, however, be able to claim your child as a dependent if the custodial parent signs Form 8332, which is a Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. Remember, however, that once you sign Form 8332, you cannot claim your child as a dependent on your taxes, and you cannot revoke Form 8332 until the next tax year.
Can I Deduct Legal Fees Following My Divorce?
Generally speaking, you may not deduct the legal fees you paid for tax advice, litigation, or counseling during your divorce. In addition, you cannot deduct legal expenses associated with generating income from property settlements or alimony payments.
You must speak to your attorney or a tax professional regarding your taxes following the divorce, as this information can make a difference in writing your divorce decree. You must also consider how your divorce will affect your retirement plans and how that will affect your taxes.
Call Our Experienced Atlanta Family Law Attorneys
At Hobson & Hobson, P.C., our Georgia divorce attorneys know that divorce can affect tax decisions and filing status. We work to help our divorcing clients understand the tax implications of divorce. We advocate strongly for our clients throughout every aspect of the divorce process so that we can protect their futures.
Call us today at (770) 284-6153 or fill out our confidential contact form. We can set up a consultation so that you can review all your legal options.
Attorney Sarah Hobson at Hobson and Hobson, P.C. are powerful advocates for those who fight for better futures for those going through divorce and custody law matters.
