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How to plan for tax season following a divorce

On Behalf of | Feb 20, 2024 | Federal And State Tax Collections |

If you have just filed for divorce, or gone through a divorce recently, you may be wondering how this will affect your taxes in 2024. Taxes can indeed be daunting in normal times, and a divorce can change things considerably.

Of course, it is important to address these matters promptly to avoid future complications.

Avoid procrastinating

After a divorce, prioritize your tax matters by consulting a CPA promptly. Early preparation can prevent last-minute stress and potential IRS issues. Gather your documents and share them with your CPA to ensure a smooth process.

Also, if you and your ex shared a tax preparer, find a new CPA for a fresh start. Provide your new CPA with past tax documents and inform them of your marital status change and any relevant details from your divorce judgment.

File with the correct status

If your divorce was pending by December 31, file as “married filing separately” to protect yourself from your ex-partner’s tax errors or debts. If your divorce became final before the end of 2023, file as “single” to reflect your new marital status accurately.

Determine child care deductions

Clarify child dependency arrangements in your divorce settlement to avoid conflicts over claiming dependents or child tax credits. Ensure your agreement aligns with IRS regulations regarding custody and financial support.

Secure your finances

Open new individual accounts to separate yourself from any joint financial ties with your ex-partner. This step helps with financial independence and shields you from potential liabilities if your ex encounters financial difficulties.

Update property ownership and division

If one partner retains ownership of the marital home, ensure the other name is off the property title to avoid joint liabilities for taxes or liens. The divorce judgment paperwork should reflect this action.

Distinguish between marital and separate property with the help of your CPA. Take stock of deferred spending accounts, retirement funds and other assets to plan your financial future effectively.

Addressing tax matters post-divorce requires clear communication and careful planning. Establishing financial independence and understanding tax implications are necessary steps toward building a stable future.