Tax Tip 2022-92; Some tax considerations for people who are separating or divorcing

IRS Tax Tips June 15, 2022
Useful Links: IRS.gov Help For Hurricane Victims News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Around The Nation e-News Subscriptions The Newsroom Topics Multimedia Center Noticias en Español Radio PSAs Tax Scams/Consumer Alerts The Tax Gap Fact Sheets IRS Tax Tips Armed Forces Latest News IRS Resources Compliance & Enforcement News Contact Your Local IRS Office Filing Your Taxes Forms & Instructions Frequently Asked Questions Taxpayer Advocate Service Where to File IRS Social Media	Issue Number:  Tax Tip 2022-92 ___________________________________________________________ Some tax considerations for people who are separating or divorcing When people go through a legal separation or divorce, the change in their relationship status also affects their tax situation. The IRS considers a couple married for filing purposes until they get a final decree of divorce or separate maintenance. Update withholding When someone becomes divorced or separated, they usually need to file a new Form W-4 with their employer to claim the proper withholding. If they receive alimony, they may have to make estimated tax payments. The Tax Withholding Estimator tool on IRS.gov can help people figure out if they're withholding the correct amount. Understand the tax treatment of alimony and separate maintenance Amounts paid to a spouse or a former spouse under a divorce decree, a separate maintenance decree, or a written separation agreement may be alimony or separate maintenance payments for federal tax purposes. Certain alimony or separate maintenance payments are deductible by the payer spouse, and the recipient spouse must include it in income. However, individuals can't deduct alimony or separate maintenance payments made under a divorce or separation agreement executed after 2018 or executed before 2019 but later modified if the modification expressly states the repeal of the deduction for alimony payments applies to the modification. Alimony and separate maintenance payments received under such an agreement are not included in the income the recipient spouse. Determine who will claim a dependent child if filing separate returns Generally, the parent with custody of a child can claim that child on their tax return. If parents split custody fifty-fifty and aren't filing a joint return, they'll have to decide which parent gets to claim the child. There are tie-breaker rules if the parents can't agree. Child support payments aren't deductible by the payer and aren't taxable to the payee. Report property transfers, if needed Usually, there is no recognized gain or loss on the transfer of property between spouses, or between former spouses if the transfer is because of a divorce. People may have to report the transaction on a gift tax return. Consider filing status Divorcing couples who are still married as of the end of the year are treated as married for the year and must determine their filing status. The What Is My Filing Status tool on IRS.gov can help people figure out what status makes sense for their situation. Here the statuses separating or recently divorced people should consider: • Married filing jointly. On a joint return, married people report their combined income and deduct their combined allowable expenses. For many couples, filing jointly results in a lower tax than filing separately. • Married filing separately. If spouses file separate tax returns, they each report only their own income, deductions, and credits on their individual return. Each spouse is responsible only for the tax due on their own return. People should consider whether filing separately or jointly is better for them. • Head of household. Some separated people may be eligible to file as head of household if all of these apply.  o Their spouse didn't live in their home for the last six months of the year. o They paid more than half the cost of keeping up their home for the year. o Their home was the main home of their dependent child for more than half the year. • Single. Once the final decree of divorce or separate maintenance is issued, a taxpayer will file as single starting for the year it was issued, unless they are eligible to file as head of household or they remarry by the end of the year. More information: Publication 504, Divorced or Separated Individuals Topic No. 452 Alimony and Separate Maintenance Share this tip on social media -- #IRSTaxTip: Some tax considerations for people who are separating or divorcing https://go.usa.gov/xJ5vb   Back to top           Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

 

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