Taxes and Divorce

It may seem that potential squabbles with your ex may be the only thing to have to deal with during divorce, yet there is an often forgotten part that rears its ugly head on occasion, taxes.

Turns out, divorce has a huge impact on your taxes, and knowing what’s at stake can help you avoid major complications later on.

Here are some of the things to keep in mind as you go through the divorce process.

Filing Status

Checking the box for either married or single may seem like the simplest thing in the world, but it gets complicated with divorce. The IRS wants to know your legal marital status as of the end of the year you’re filing for. So even if you’ve filed your paperwork, if your divorce isn’t final by Dec. 31, then you’ll be considered married for the year.

However, there’s an exception that allows separated parents to claim the favorable head of household status, which gives you greater deductions. To qualify, you must have paid more than half your housing costs for the year, lived apart from your spouse during the last six months of the tax year, and your dependent child must have lived in your home for more than half the year.

Read More: Daily Finance