January 29, 2023, In Divorce
As we ring in 2023, divorcing spouses throughout California often celebrate the new year as a symbol of turning the page and starting their new lives.
At WHITMARSH FAMILY LAW, PC, our Los Angeles divorce attorney knows that a new year also means filing your 2022 taxes in time for the Internal Revenue Service 2023 deadline.
If you were officially still married when the clock struck midnight on December 31, 2022, your filing status, taxable figures, and deductions will be impacted based on how you and your soon-to-be-ex-spouse (or newly ex-spouse) file your taxes.
Although this article is not meant to be construed as tax advice, here, our Los Angeles County family law attorney discusses the impact of divorce on your taxes.
How Does a California Divorce Affect My Taxes?
Taxes for California divorcing couples are affected in three primary ways:
- Filing Status
- Property Division
- Dependency Exemptions
How Does My Tax Filing Status Impact My Return?
Divorcing couples have a few options when it comes to their tax filing statuses.
If your divorce is not yet final, you may file your taxes jointly with your spouse just as you always have, but ONLY if both spouses agree to do so. This is also true if the two of you are separated.
In some cases, you may file for Head of Household, even if you have been separated for at least half the year and have at least one child in your care more than half the time. If you are eligible to file as Head of Household, you will likely pay less in taxes for the year.
If your divorce is ongoing and neither you nor your spouse agrees to file jointly, and you are not eligible to file your taxes as Head of Household, you must file your taxes as “married but filing separately.”
Unfortunately, this status usually comes with highly unfavorable tax rates. It can also lead to a confusing return — especially if you are not in contact with your soon-to-be-ex-spouse — because California is a community property state. This means you may need to claim at least part of your spouse’s income from the previous year and must divide the deductions and dependency exemptions each of you shares.
Whether you plan to file jointly or separately while in the middle of your divorce proceedings, it is important to speak with a tax professional to ensure all the information you are submitting is correct. You and your spouse are still responsible for the information listed on the return and will be held accountable for those details by both the State of California Franchise Tax Board and the IRS.
Is Child Support Tax Deductible in California?
In general, any California child support payments are not considered income to the recipient, nor are they tax-deductible to the payor.
Is Spousal Support Tax Deductible in California?
The Tax Cuts and Jobs Act states alimony or separate maintenance payments relating to any divorce or separation agreements dated January 1, 2019, or later are not tax-deductible by the person paying the alimony. The person receiving the alimony also does not have to report the alimony received as taxable income.
Assess the Joint Tax Return Before You Sign
Never sign a tax document without first verifying that all the information is accurate. This is especially true when filing jointly. Both spouses will share equal responsibility in all tax obligations, liabilities, and penalties that may be brought on by incorrect data. Even if one spouse’s income contributed to the refund or liability, you both must share the amount equally.
In turn, any refund you receive must also be split equally.
If you have questions about your divorce, and how it will impact your financial status and tax filing, contact our skilled family law attorneys in Los Angeles County at WHITMARSH FAMILY LAW, PC by calling (310) 552-3505 to schedule a free consultation today.
We can help provide solutions that produce results.
