7 Common Tax Questions on Divorce


by Michael Lodge

Thank you to the law firm of Bohm and Wildish blog in Orange County California that provided 7 common tax questions regarding Divorce.  For the past week I have been writing blogs on marriage and divorce to help clients to be informed during the time they are either going into marriage or getting out of a marriage.  There are many tax issues that need to be thought of and to plan for.

1. The spousal support received is considered taxable income, whereas the paying spouse can deduct those payments on their tax returns. Child support is neither tax deductible nor tax includable. It comes out of post-tax dollars.

2. Existing federal and California law allows the custodial parent to claim the dependency exemption for all children on their income tax returns. However, the parents can choose a different route for the dependency allocations if they prefer. It’s actually recommended that they agree on the dependency exemption because it allows both spouses to save on their taxes.

Trust your family law attorney and accountant to help you understand the financial path ahead of you.

3. Detailed record keeping helps resolve potential disputes between you and your ex-spouse. Keep track of the date and amount of each payment, regardless of whether you paid or received support.

4. You can still file an individual tax return if your divorce is not final by the end of the year. Consult with your accountant about your best option, but it’s likely the recommendation will be that you file married but separate or file jointly with your spouse. If your spouse is self-employed or you have concerns about him/her not fully declaring their income, that could be a good reason to file a separate return, even if your divorce is not complete.

5. When you start preparing your annual tax return, ask for advice on deducting some attorney and/or accountant fees for both states and federal income tax purposes.

6. Before you start preparing your income tax forms, visit the IRS web site to access the Tax Information for Divorced and Separated Individuals booklet.

7. Laws regarding “innocent spouse” status were put in place to protect spouses who fell victim to their ex’s inaccurate joint tax return. Find out how you may benefit: Innocent Spouse and the IRS.

If you have any tax questions please contact our office at:  877.778.1770

These seven items were provided by the law firm of BOHM WILDISH LLP, ORANGE COUNTY FAMILY LAW ATTORNEY