There are two things for certain in life: death and taxes. Both of these situations can be complicated to deal with. Another challenging combination: divorce and taxes.
Both divorce and taxes are emotional events. You may be just getting over a divorce and then realize that you’re in tax season. Taxes are in fact more harder once your marital status changes from married to separated or divorced, but it’s not as bad as it seems once you understand the process.
For the average tax return, you’re probably OK filing your usual way, whether it’s with software such as TurboTax or a tax preparation company like H&R Block. If you anticipate some complications, though, having an accountant or other financial expert on side may be a good idea. Other than that, here are some things you should keep in mind as you do your taxes this year.
The biggest change is to the W-4 form. This form no longer calculates your income tax withholding by using your personal allowance. If your spouse had been claiming a personal allowance while you were married, you’ll need to update your W-4 and give it to your employer within 10 days after you divorce or separate.
You may feel like you’ve been divorced for a long time, but you’re not officially divorced until there is a divorce decree. So for your 2020 taxes, you are still considered married if your divorce was not finalized by December 31, 2020. Even if you are living apart, you are still considered married in the eyes of the law. This may not make sense to you, but that’s how the IRS categorizes relationships. After all, there has to be some consistency. So if your divorce was finalized on or before December 31, 2020, then you can file as single this year.
If you are still considered married, then you have two options: file separately or jointly. Many opt to file separately, especially if they and their spouse make the same amount of money. While this option will limit your deductions and likely cause you to pay more in taxes, if you get a refund, it’s all yours. You don’t have to split it with your ex, which is always a good thing.
Filing jointly, however, gives you more credits. You can take advantage of a higher standard deduction. Plus, if you have children, you can claim credits such as the Child and Dependent Care Credit and the Earned Income Tax Credit.
A divorce can be complicated enough, but when tax season rolls around, life can be even more challenging. You may be confused about how to file and which deductions you can claim.
Get help with taxes and other financial issues from the Columbia divorce lawyers at The Law Offices of Todd K. Mohink, P.A. We can help you understand your filing situation so things are less confusing. Call (410) 774-5987 or fill out the online form to schedule a consultation today. We have two offices to serve you.
7310 Ritchie Highway, Suite 910
Glen Burnie, MD 21061
30 Corporate Center
10440 Little Patuxent Parkway,
Columbia, MD 21044