Filing Status

Your tax filing status is determined by your marital status on the last day of the tax year. Couples who separated last year, but whose divorce won’t be finalized until this year, may be wondering the best way to handle their tax returns.

While you may still file a joint return, there are other options that you may wish to consider and about which you should consult with your CPA. For instance, while there may be benefits to filing jointly, it is also possible that a joint return is not the avenue for you and you may wish to choose the married filing separate status. If you opt for the latter, you may be able to save money by claiming head of household as your filing status, which offers a larger standard deduction. Deductions may reduce your taxable income for the year, which may bring your tax bill down or bump up the size of your refund.

According to the IRS, there are a few qualifying factors which allow a married person to be considered “unmarried” and claim head of household status:

  • Your spouse lived outside of your home for at least six months;
  • You provided at least half of the costs to maintain the house for the entire year;
  • You cared for at least one child for more than half of the year;
  • Your home was the primary residence for that child for more than half of the year;
  • You must be able to claim an exemption for that child.

It’s important to note that only one parent may claim a child as a dependent. So, for example, if you have two children, you may each claim one.

Critical Change to Florida Alimony Laws

There was a significant change to alimony tax laws about which you should be aware. More specifically, as to alimony awarded on or after January 1, 2019, the alimony payments are no longer taxable to the recipient or deductible by the payor under the new tax law.

**Note: For alimony payments made pursuant to a final judgment entered before January 1, 2019, the payments may still be taxable to the recipient and deductible by the payor. These are complicated issues. As such, making decisions in connection with your taxes and tax returns may have significant financial consequences.

It is important to seek the advice of a certified public accountant (CPA) or tax attorney so that you fully understand the potential tax ramifications. And, for your family law matters, contact your family law attorney.