While tax time for most Florida individuals has come and gone, there are still some that have not filed. Some filers end up taking extensions to sort out complicated issues when it comes to their tax filing. There’s no time like the present to prepare for proper tax planning in the event of a divorce. Tax issues arise among those who recently obtained a divorce, as well as those who are experiencing it firsthand.
While divorce is often an emotional roller coaster ride, each spouse needs to plan ahead based upon their income and expenses. This is especially true with taxes. Take alimony and child support, for instance. Alimony is, as a general rule, taxable for the spouse receiving the support and is even a deduction for the spouse that is paying it. However, child support is not taxed nor deducted.
When children are involved in a divorce, each spouse may want to be able to claim the child as a deduction at tax time. However, both spouses cannot do this. As a general rule, it is the parent with physical custody of the child that gets to claim the dependency exemption. The parent who gets this benefit is generally the one with whom the child spends the most physical time. However, as a couple, you can decide upon other arrangements in the divorce settlement such as one spouse claiming the exemption in even years and the other spouse in odd years – similar to how holidays are divided among parents.
If couples aren’t divorced by the end of the year — meaning that the divorce is not finalized in the court by a judge — you may file jointly as a married couple. If the divorce has been finalized by December 31, then the parties must file separately from one another. Regardless of the matter, tax time is a time which requires significant planning among those seeking a divorce or those that finalized a divorce. It is definitely something that Florida couples should take into account and be aware of in order to minimize problems in the future.