Levins Tax Law
Schedule your initial consultation:

Experienced and Trusted
Representation From A Tax
Attorney And Former IRS Agent
And "BIG 4" Tax Partner

Photo of Attorney Gerard J. Levins

How does a divorce affect taxes?

A divorce can change the deductibles available, the claims made and the status used when filing taxes.

For many Massachusetts residents, tax season is a stressful time. While only 0.5% of returns are audited over the course of a single year according to the IRS, many filers are still worried about having their return examined. When a person has a big life change, such as a divorce, he or she may be even more concerned about filing his or her taxes correctly. Understanding how a divorce can change a person’s taxes can help alleviate some of these fears.

The deductibles available

Many people try to apply as many deductibles as possible when completing their taxes to reduce the amount of taxable income. When a person gets a divorce, it may change the deductions he or she can make. Some divorcees may think they can deduct their alimony or child support payments. However, this is typically not the case. Because this money is used to cover normal living expenses, the person making the payments cannot reduce his or her taxable income and the person getting the payments is not expected to count the money as a part of his or her income.

Because separating marital property can be so technical, many couples turn to legal help through the process. Most of the money spent on lawyers cannot be used as a deduction. However, if someone paid for tax-related guidance, it may count as a deductible.

The claims made

When a married couple files taxes, both parents get the benefit of claiming their children as dependents, which can help reduce the amount of taxes required. However, divorced parents must make sure that only one person claims a child. The exes can decide between themselves who gets to claim the children. They could even each choose to claim one if there are more than one kids involved. If the two cannot decide who gets to make the claim, the custodial parent usually gets the tax break.

The status used

One of the biggest changes a divorce can have on how a person files his or her taxes is the status used. A married couple, for example, can choose to file jointly or separately, but they are always considered married. A single person has to label him- or herself as such. A person can figure out what his or her status should be by considering his or her married status as of the last day of the year. If the legal proceedings have been started, for example, but the marital dissolution is not final at the end of the year, the tax filer must use the married status.

A divorce does not change a Massachusetts resident’s responsibility to pay in his or her taxes. If a change in relationship status leads to an audit, it may be beneficial to work with an attorney familiar with tax law.