Tax Tips for Divorcees

In an ever-changing tax environment, one question commonly overlooked during the course of getting a divorce is, "Who gets to claim Head of Household status?"  This is a question that could end up saving you thousands on taxes, but there are certain restrictions to being able to claim this status.

  • You must have a child living with you for more than half of the year (joint custody that is 50% each means neither party qualifies)
  • You must be legally separated by the end of the tax year
  • You must've paid more than half of the cost of keeping a home for the year.

If you qualify for this status, there are more favorable tax brackets for you as well as a larger standard deduction (for 2019, it is $18,350 for those filing as Head of Household vs. $12,200 for single filers).  If you have multiple children, there are ways to structure your custody agreements so that both parents can potentially claim Head of Household status.  

Another consideration is the child tax credit.  This is a direct offset to your tax bill of $2,000, and it is certainly something worth discussing when getting a divorce.  

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Published on 11/26/2018.