Texas residents who are in the process of divorcing may be interested in how the divorce will impact their tax situation. A divorce can change a person's income, assets, debts and even name, so it is little surprise that it can significantly affect one's taxes. Individuals who have recently finalized a divorce are advised to carefully review their situation and account for all necessary changes.
The most obvious change is one's filing status, which is based on one's marital status as of Dec. 31 of the previous year. If a person is separated but legally married at the end of the year, they are still considered married for tax purposes. They can either file joint or separate returns. If the divorce is final by Dec. 31, the person can file as a single person.
Another important consideration is whether one's name has changed. The IRS requires individuals to use the name that is on file with the Social Security Administration. Even if a person starts using their maiden name or some other last name, they must file under their married name if that is the name that's on file.
Spousal support is a big adjustment for some individuals. Those receiving court-ordered alimony have to include it in their taxable income, and it is deductible by the person making the payment. The legal costs from a divorce aren't generally deductible, except in cases where the advice was directly related to filing taxes. An experienced divorce attorney could help a newly divorced individual understand their new financial and tax situation. When appropriate, the attorney may refer the individual to a tax professional who has specialized knowledge for their situation.
Source: Yuma News Now , "How Marriage And Divorce Can Impact Your Taxes", April 05, 2014