Divorce and legal separation can alter tax habits

The process of going through a divorce or legal situation can be difficult. Handling one's own taxes can be difficult also. Combining the two activities can make for a complicated time all around. Any Maryland couple who has recently gone through a divorce or legal separation may want to understand how their taxes will be affected this year.

Things change when the parties go from filing jointly to filing individually. It may be habit to claim a child on a tax return, but it is only legal for one parent to claim the child. Parents who are separated or divorced may need to be very clear about who will be claiming the child or children, as there can be serious consequences if both parties do in one year.

The issue of alimony must also be dealt with on tax forms as it is tax deductible for the party that pays it, unlike child support. The amount received and listed on one return must match up with the records of the party that made the payments. Any discrepancies can lead to the IRS investigating and possibly lead to both parties having to file amended returns.

The Tax Code is inherently complicated in any manner that it is approached, whether the filer is single or married. However, knowing ahead of time just how a legal separation or divorce will impact taxes and other finances can help both parties prepare and move forward. Any Maryland couple who is confused or unsure of what to claim or how a divorce will impact them directly may benefit from understanding the current laws.

Source: post-gazette.com, Communication key for estranged couples during tax time, Tim Grant, Jan. 9, 2014