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How divorce changes tax filings

Taxes are one of many things that will change for people in Texas who get a divorce. The switch from filing as married to filing as single or as head of household, if there are dependents, and the move to a new tax bracket happens in whatever calendar year the divorce occurs. Therefore, if an annulment, separation or divorce is finalized on or before the final day of 2017, when the person files taxes for that year, the filing status will have changed. An annulment introduces the additional complexity of needing to amend previous years' tax returns to indicate that both people were not married at the time.

The child tax credit and the dependent exemption for the couple's children can only be taken by one parent. The custodial parent usually takes the dependent exemption, but if the divorce agreement gives it to the other parent, that parent must file Form 8332 along with taxes to get the exemption. If there was a house and one person took it, that person gets the mortgage interest deduction.

Taxes must be paid on alimony by the recipient. The alimony is tax deductible for the payer as long as it is mentioned in the divorce agreement. People may want to see a professional for their taxes in the first year after divorce to ensure there are no errors.

In a high-asset divorce, divorce negotiations may involve more than child custody decisions and dividing property, such as a home. Other real estate, investments and even a business may need to be divided. The business may be particularly complex since under Texas community property law, one spouse may be able to claim half ownership even if that spouse was not involved in running the business. An attorney may be able to advise a person about strategies for property division.

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