Knowing how to correctly file taxes is essential in order to avoid any potential pitfalls or consequences that may arise from incorrectly filing taxes.
Here are some tips on how to determine your tax filing status and navigate this complex aspect of post-divorce life.
- Consult your divorce decree or settlement agreement
These documents provide valuable information about any tax liabilities that may arise from the separation. Take the time to thoroughly read through these documents, paying close attention to the legal language used. If you come across any terms or provisions that you’re unsure about, it’s always advisable to seek guidance from a lawyer who can help interpret the terms and ensure you have a clear understanding of your obligations.
- Understand your filing status and its associated responsibilities
Understanding the different filing statuses, such as single, married filing jointly or separately, and head of household, is crucial for accurately determining your tax obligations. By knowing your filing status, you can ensure that you comply with the tax laws and regulations applicable to your specific situation. Additionally, your filing status will dictate which tax forms you need to submit to the Internal Revenue Service (IRS) when filing your taxes.
- Gather necessary documents
Make sure to have all relevant documentation when preparing to file taxes after a divorce. This includes income documents like W-2s, 1099s, and other forms of taxable income; tax deductions like mortgage interest payments or charitable donations; and prior year’s taxes.
- File returns separately
Unless you are legally married on the last day of the year, you must file your taxes as a single person in order to avoid any potential issues. Be sure to check with the IRS if there is any additional information that needs to be included in your filing.
- Talk to a financial advisor
It’s always best practice to involve an experienced and knowledgeable financial planner or advisor when making decisions about taxes, especially following a divorce. An expert can provide practical advice on how to make the most of tax incentives and deductions, as well as how to avoid any potential pitfalls.
- Speak with your lawyer
Since divorce decrees and settlement agreements can be quite complex, it’s important to talk to a lawyer about any specific terms regarding taxes that may appear in these documents. This will help ensure you are correctly filing your taxes after the divorce.
Overall, it’s essential to take the necessary steps and get help from professionals if needed in order to accurately determine your tax filing status following a divorce. Doing so can go a long way in helping avoid any complications or expensive fees down the road.
Work with us
If you have more questions about tax planning in divorce, our team is here to help you every step of the way. At Purposeful Wealth Advisors, we work closely with divorce attorneys, accountants, and other dedicated professionals to arrive at comprehensive solutions for our clients.
Contact us today to know more!
While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS,
we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with
the appropriate professional. The foregoing information has been obtained from sources considered to be
reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data
necessary for making an investment decision, and it does not constitute a recommendation. Any opinions
are those of Purposeful Wealth Advisors and not necessarily those of Raymond James.