Filing Taxes After Divorce
Taxes can be stressful even when you feel like you have the rest of your life together. When you add in the stress of divorce, thinking about how to approach taxes can feel insurmountable. This may be something to discuss with your New York City divorce attorney. When you work with Vivien F Stark PC, we may be able to provide you with insight or referrals to someone who can help you adjust to your divorce.
Things To Consider When Filing Taxes After Divorce
Many things change after a divorce, affecting how you file taxes. One administrative task that should be addressed is ensuring that your documents match or that you know what information to use for your taxes. If you choose to change your name after the divorce, you must ensure that information is updated on your social security card. You can change your name using social security online.
If your divorce has not been finalized before the end of the year, you will still be filed as married. The Internal Revenue Service (IRS) will not consider you divorced until the final decree is filed. Your divorce attorney may advise you to file as ‘married filing separately’ because filing jointly may open you up to additional liability. You may be eligible to file as ‘head of household’ if your spouse did not live with you for the last six months of the year, you paid more than half the costs of supporting your household, and your home was the primary home for your child.
If your marriage was annulled, you may need to file amended returns for the years you were married. You can file electronically through the IRS website. Additionally, you will need to consider how alimony or child support payments may affect you, and you may need to adjust your tax withholdings with your employer. The custody agreement may affect your ability to claim dependents if children are involved.
IRA
People may choose to withdraw money from an IRA to cover the costs of the divorce. This is not an uncommon thing. However, you should be aware that it can dramatically affect your taxes when you file. The standard penalty for an early withdrawal from an individual retirement plan is 10%.
Protecting Yourself For Tax Season
When protecting yourself in a divorce, the answer is almost always to gather information. Make efforts to get as familiar with your finances and income as possible. This information can prepare you for what to expect come tax season. If you generally do taxes yourself, you may want to hire a tax professional for the first year after the divorce to ensure that things are accounted for appropriately and any mistakes are caught early. If you have concerns regarding any joint filings from when you were married, you may be able to file for innocent spouse relief if the errors were due to underreporting by your spouse that you were unaware of. Regardless of your situation, the way to best protect yourself is by securing an attorney. The Law Offices of Vivien Stark can help you navigate this time and prepare you to start your new life.