By Pamela Edwards-Swift, CFLS
It’s that time of year again, the dreaded April 15 deadline. You need to be aware that during the course of a divorce proceeding, a number of tax issues may arise. These issues need to be addressed with your attorney and/or tax advisor. Some, but not all the issues that arise are the following:
- Joint tax returns – Whether or not you will, or should, continue to file a joint tax return with your soon to be former spouse, depends upon your individual circumstances. A person, whether separated, or not, has the right to file an individual tax return. If a joint tax return is filed, both parties will be jointly and severally liable to the taxing agency, for taxes owed (which means the taxing agency can go after one or both individuals for payment). The decision to file a joint tax return or separate tax return should be addressed with your tax advisor. There are benefits and risks to both.
- Claims of Exemption – If separate returns are filed, who claims the children? Unless there is an agreement, in writing, to the contrary, the person who has the children more than 50% of the time is presumed to have the ability to claim the children as exemptions for income tax purposes. If there is an equal custody share, you need to resolve this issue with your spouse, attorney and tax advisor to resolve.
- Support as Income/Deduction – If you are the payer of child support, you cannot deduct this amount from your taxes. If you are the spouse who receives child support, this is not attributable to you for tax purposes. If you are the payer of spousal support, and there is actually a court order for spousal support, this amount may be deducted from your income taxes. If you receive spousal support pursuant to a court order, then you must claim the amount received as income on your income taxes. As a general rule, family support ordered by the court is deductible from taxes by the payer and claimed as income by the party who receives it. However, this is something you will need to confirm with your attorney.
- Claiming of mortgage interest and property taxes – This is an issue to discuss with both your attorney and your tax advisor. As a general rule, the spouse who paid the mortgage and property taxes post separation will get the deduction. But, if that same spouse is asking for reimbursements of this expense, or the expense is paid in lieu of child support, or for a myriad of other reasons, the general rule may not apply.
These are just some of the, but the most common, issues to be considered in a divorce proceeding. Happy Income Tax Filing!
Pamela Edwards-Swift, Certified Family Law Specialist, 2010, 2011, 2012, 2013 & 2014; Southern California Super Lawyer