When Texas couples are preparing to divorce, it is important for them to understand the changes that will happen with their taxes. They need to anticipate the fact that their financial situation could be significantly different as a result.
After people are divorced, their tax filing statuses will change. They will need to file as single taxpayers or as the head of household if they qualify. The single filing status has a lower standard deduction than the head-of-household status does. People will also likely be in different tax brackets if their former spouses also worked. If people get annulments, they will have to amend their old returns to single-filing statuses because the law will treat their marriages as if they never happened.
Following divorces, parents will need to determine who will be able to claim the dependent exemption. The IRS defaults to the custodial parents. If the parents have divorce agreements or orders that give the noncustodial parents the right to claim children on their taxes, they will need to sign a Form 8332 that will have to be attached to the noncustodial parent’s tax return. There are other deductions that are also available to parents who claim the dependent exemptions. If a person will be paying alimony, his or her payments will be deductible while the recipient must report the payments as income.
Post-dissolution tax changes are only some of the numerous divorce issues that people will need to handle in their divorces. People who are divorcing might want to talk to experienced family law attorneys about the various issues with which they are wrestling. Divorce attorneys may help their clients to view the issues from a logical perspective so that their clients make decisions that are smart for them.