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Divorce can lead to several tax changes

On Behalf of | Feb 7, 2018 | Divorce |

The financial considerations that come with the end of a marriage can take many Missouri divorcees by surprise. A divorce always carries significant emotional and practical consequences, but the financial impacts of a split can last for many years. For example, ex-spouses will have to consider their new roles as independent taxpayers.

An ex must update their income tax status for the year of the divorce, no matter which month the order was confirmed. The filed income tax returns are due before April 15 of the next year. For the tax year in which the divorce was finalized, both former spouses must file their taxes as single. If the divorce was not yet officially final before December 31, however, divorcing spouses must file their returns for that year as a married couple.

This is not the only tax issue that arises following divorce, especially for parents. Each dependent child brings a tax exemption that can be shared by a married couple. However, after a divorce, only one parent can claim the exemption for any given child. By default, the parent who spends the largest amount of time with the child is granted the exemption and considered the custodial parent. However, the couple can decide as part of their divorce settlement to accord the tax exemption to either parent.

These are not the only concerns that arise relating to taxation after divorce. There may be questions about how the transfer or sale of assets in accordance with a divorce decree can affect taxes. Furthermore, spousal support also has tax implications. A family law attorney can help a divorcing spouse protect their assets and obtain a fair settlement.

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