Divorce is never easy for you and your children, and doing your taxes with both in mind for the first time just adds to the stress. There are a few factors that set the course for your first tax filing after the California divorce process is completed.
Your eligibility for declaring as a head of household depends on three primary California divorce pre-requisites: if your divorce occurred on or before the last day of the year, you paid at least 50% of the home upkeep over the past year, and a “qualifying person” has lived with you for at least half the year (other than a son/daughter away at college or another “temporary absence”).
If a California court has not finalized your divorce and declared it a legal separation, you are still able to file as head of household, provided you filed a separate tax return, paid at least half of the home’s upkeep needs for the tax year, lived separately from your spouse for the year’s last six months, housed your child for at least half the year, and can claim an exemption for that child. However, if your spouse claims the child as an exemption, you can still meet these requirements.
Who claims your child/children as a dependent?
You and your spouse cannot both claim your child as tax exempt if you file your tax returns separately. The IRS generally entitles the exemption to the parent that has housed the child for the majority of the year.
However, if the non-custodial parent has furnished over 50% of the child’s support, he or she is allowed to claim the child for exemption. This involves filing a separate form (IRS Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents), signed by the other parent.
This brings up the issue of child support payments as a taxable or deductible expense.
What about child support?
Child support payments are tax-free for the recipient of those payments, and cannot be deducted from the payer’s taxes. However, someone paying alimony can deduct those payments ordered by a court or written agreement, while they must be reported as income for the alimony receiver.
Often a divorce involving children and sole custody can leave the non-custodial parent feeling powerless and helpless. This is no different when tax time comes around, especially if you and your ex-spouse are at odds with who should declare your child as a dependent and the ratio of child support-to-alimony payments.
A veteran California divorce attorney can ease the pain of your divorce battles. Many of these potential issues can be resolved step-by-step with the help of your divorce attorney. An experienced divorce attorney can help put everything in perspective and make the whole divorce process as painless as possible. Contact us to learn about your rights throughout the divorce process.