If you have made a legal decision to file a petition in a Missouri court to end your marriage, the following months will no doubt include a decision-making process, especially if you have children. It is natural to focus on issues that directly pertain to your children. However, in a divorce, it is also necessary to think about additional matters of importance, such as tax implications that might affect your settlement.
To ensure that you maximize your assets in a divorce, it is critical to understand that your taxes after your settlement might be different than they were during marriage. Being well-informed about state and federal laws helps ensure that you will achieve a fair agreement with your ex. It is also good to know where to seek support if you have tax questions during divorce proceedings.
December 31st is a significant date regarding taxes and divorce
Your marital status on December 31st of a particular year determines your filing status for taxes in that same year. This means that, even if you know that you will be getting a divorce, if you are legally still married on the last day of the year, you must file your taxes accordingly. Because of this, many spouses wait until a new year has arrived to procure a divorce because they owe less by filing as a married couple.
Things to know about ”head of household” tax status
If you have been filing your taxes during marriage as ”head of household,” your status might change after you finalize your divorce. To continue filing under this same status, you must meet the criteria, which typically includes having a qualified dependent living with you full-time for at least six months out of a year. If you provide half or more of living expenses for a parent who lives with you, you might also still qualify for ”head of household” status on your taxes.
Additional tax issues that affect a divorce
As you prepare for divorce, it’s wise to seek financial counsel regarding taxes. Numerous issues, such as deductions, refunds, penalties or claiming of dependents, may have a significant impact on your settlement. Working with a financial advisor helps ensure that you receive the best deal possible when you finalize your divorce.
What if tax disputes arise?
A Missouri family court judge uses state-issued guidelines to make decisions regarding property division issues in a divorce. Such guidelines include information about taxes. If you and your ex disagree about a tax issue or other financial matters, it can delay your settlement.
To achieve a fair agreement, you must resolve all relevant issues regarding assets and liabilities. Many spouses choose to seek legal support before heading to court, especially those who do not feel knowledgeable or experienced enough to handle disputes about taxes or other financial matters on their own.