Going through a divorce in New York means you’ll have a lot of things to consider. Once your divorce is final, your taxes will change. This is something many people don’t know, but having information ahead of time can help to prevent unpleasant surprises.
What happens when you file taxes following your divorce?
There are many details pertaining to tax considerations and divorce. When you’re married, you get to file your taxes jointly, which helps you to save money on how much you pay. However, when you file your taxes after a divorce has been finalized, the process can be much more complex. Typically, you are left with a higher amount owed. You will also have to know what happens to things like your income, spousal support and child support.
Choosing your filing status after divorce
Tax considerations and divorce can make filing much different. Depending on child support arrangements, you may have an option of how to file your taxes. You can choose either single or head of household. If your marriage didn’t produce children or you’re the one receiving child support, you’ll have to file as single since you don’t pay the majority of money toward a dependent. However, if you provide the cost of care for a child, head of household is the better option for filing.
New tax brackets and tax rates
More considerations involving taxes and divorce involve new tax brackets and tax rates. When you’re divorced and suddenly filing as single or head of household, there may be limits to your federal tax brackets. You’ll probably also be paying a different tax rate. If you earned more than your spouse, your tax rates may be higher. However, if the opposite is true, you may be paying less in taxes.
You may be able to claim certain tax credits if you have dependent children and file as head of household:
- Child tax credit
- Child and dependent care credit
- Credit for other dependents
- Earned income tax credit
An attorney or tax accountant can help you if you have concerns about how to file taxes once you’re divorced. You can get helpful advice so things can be easier to understand when it comes time to file.