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Divorce and taxes: Three things you must know

April is approaching fast. That means that tax season is here.

Taxes are often the last thing anyone wants to think about, but recently divorced individuals must take their taxes into careful consideration. Getting a divorce significantly changes an individual’s financial circumstances, and therefore can significantly change how they complete their taxes as well.

Here are three things that individuals must know when filing their taxes after divorce.

1. Determine your filing status

This can be a surprisingly complex issue. One’s filing status depends on when they finalized their divorce:

  • If individuals finalized their divorce before December 31, 2019, they can file as single or unmarried; however
  • If individuals did not finalize their divorce until after the new year, they may still have to file jointly with their spouse or file as married filing separately. This is because they were still considered legally married in the tax-filing year.

Some individuals may also be able to file as head of household, but they must meet certain conditions to do so.

2. Only one parent can claim children as dependents

The child custody agreement will also impact how individuals file their taxes. If one Illinois parent has primary physical and legal custody of the children, they will likely be the one to claim the children as dependents.

However, this can become a little more complicated when parents share 50/50 custody of their children. In these cases, parents could possibly switch off every other year claiming the children as dependents. They must only remember that both parents cannot claim the children as dependents in the same year.

3. Remember – no more tax deductions for spousal support

In the past, individuals who paid spousal support could mark it as a deductible, while those who received it had to mark it as income. That all changed in 2018.

Individuals must keep this information in mind as they complete their taxes this year.