Are You Separating From Or Divorcing Your Spouse (Or Thinking About It)?

There are special considerations for people who are in this unfortunate situation.  Not only is their relationship changed, but the tax status is affected as well. 

Important things to consider or do:

  • Update your withholding with your employer by filing a new Form W-4. 
  • If you are receiving or negotiating spousal support (alimony or other payments from your spouse), this will determine the income taxability of the same.  There may be a need to increase your withholding or to begin making estimated payments.  If you need guidance on this, check with your tax preparer or visit irs.gov and use the tax withholding estimator tool. 
  • If you are the paying spouse, there may be deductions allowed for payments described above.  Here again, check with your tax preparer or visit irs.gov and search the type of payment you are making to help determine deductibility. 
  • The date of such an arrangement for payments by either the paying spouse or the receiving spouse can have an impact on whether the payments are taxable or deductible.
  • If there are children in the relationship, determine who will claim a dependent child.  Both parents are not entitled to claim the same child. 
  • Child support payments are usually not reportable, nor are they a deduction.
  • Have property transfers taken place as a result of the separation/divorce?  These transfers could impact income taxes.

The above list is just a few of the considerations to be made.  However, one of the most important considerations is to determine each spouse’s FILING STATUS.  Just because two people are no longer considering themselves as being married does not justify them to select SINGLE as their filing status.  In the eyes of the IRS, the only two ways two people who have filed a Married Filing Joint return in the past to change their filing status to Single is by way of the death of one of the spouses or by a Court decree or separate agreement before the Court.  If divorcing couples are waiting for a decree of divorce from the Court and December 31 passes, they are still considered legally married in the eyes of the taxing authorities. 

The What Is My Filing Status tool on IRS.gov can help to determine what your filing status is.  Keep in mind that by selecting the filing status of:

  • Married filing jointly – the combined income of both the husband and the wife as well as the combined allowable expenses are reported. 
  • Married filing separately – each spouse files a separate return reporting their own income and deductions.  Bear in mind that both spouses must use the same method of deductions – either standard or itemized.
  • Head of household may provide for separated people if certain qualifications are met with regard to the estranged spouse not living in the home during the last six months of the year, payment of the cost of keeping up the home, and if the home was considered the main home of the children

Many details can impact your income taxes, so do your research or work with your tax preparer for the knowledge needed for your particular situation.

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About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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