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How does divorce affect taxes?

One of the last things on your mind when you get divorced in Arkansas is probably taxes. However, once tax time rolls around, you may wish that you were more concerned with it. This is because divorce can have major implications on your taxes, according to TaxAct. Understanding what to expect can prevent the major shock when it is time to file your taxes.

To begin with, if you have children, you must plan ahead for who gets to claim them. Claiming dependents probably entitled you to deductions and many credits in the past. This lowered your tax liability. You may not have paid anything and received quite a bit back in a refund. However, once you divorce, you may not get to claim the kids. If this happens, you could be in for a real shock when you see how much your owe or how little you get back. Typically, who claims the kids on taxes is decided as part of your divorce settlement. Make sure you know when it is your year to claim them.

Another major issue is that your filing status changes. You probably used to file jointly as a married couple. This entitled you to the highest deduction and lowest tax bracket possible. Now that you are single, you will have to file as single or head of household. Filing single means you pay the most taxes and have the least deductions. Head of household is next best to filing jointly, but you can only use this if you have qualifying dependents.

As you can see, you may end up paying a lot more in taxes now that you are divorced, so you need to plan ahead. This information is for education and is not legal advice.

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Gramling Estes Law Firm

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Gramling Estes Law Firm
One East Center #140
Fayetteville, AR 72701

Phone: (479) 521-4444
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