How this year's divorce will impact your taxes

As the year comes to an end, some people are starting to think about next April's tax deadline. For those whose divorce became final in 2016 and even for those still in the divorce process, there are some important things you need to be aware of. Failure to accurately report changes in your family situation could result in costly penalties.

Even if your divorce became final way back in January of this year, you cannot file as a married person. You either need to file as single or head of household.

If you have children, you can claim them as dependents if they lived with you for the majority of days of the year. However, even if that's not the case, with your spouse's authorization, you can claim a dependency exemption.

If you are receiving spousal support, you need to report it as income. If you're the one paying support, you can include it as a deduction even if you don't itemize your deductions. Note that any additional money you give your ex outside of the amount designated in the divorce decree is not deductible. It's important to make sure that the amount of alimony that you and your ex report as received or paid on your taxes needs to be the same.

Unlike spousal support, child support is not tax deductible. It is also not considered taxable income.

These are just a few of the impacts that your divorce will have on your taxes. There may also be reporting changes regarding property, retirement accounts and other assets.

It's best to have a tax advisor throughout the divorce process who can offer guidance on the potential tax ramifications of your decisions. It may be a good idea to have a tax professional do your taxes in this first tax filing after your divorce to help ensure that everything is properly reported. If you don't have your own tax advisor, your family law attorney can likely recommend one in your area.

Source: Ventura County Star, "Sunken: Divorce can be taxing situation," Sandra Sunken, accessed Dec. 13, 2016

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