Tax questions to ask if you're getting a divorce

by Center for Personal Finance editors

SAN FRANCISCO (2/12/07)--Filling out tax forms is difficult enough, but for people going through a divorce, there's an even greater need to get--and stay--organized as early as possible (MarketWatch.com Feb. 2).

Author Eva Rosenberg recommends you iron out the answers to several questions before you sit down to file your taxes:

• Filing status. Decide how you'll be filing your return this year: married filing separately, single, or head of household. Do you plan to file jointly with your soon-to-be ex-spouse or do the drawbacks and dangers outweigh the tax benefits?

• Deductions. Determine whether your divorce costs are deductible, and whether your attorney can help you prove which costs are tax deductible.

• Alimony. Figure out alimony's tax effects--on you and your spouse. Can you pass along the same amount of money with lower tax consequences?

• Children. Decide who's going to get the exemptions and credits, or whether you can split them between you and your spouse.

• Mortgage interest. Decide who's going to get the mortgage interest deduction for the year.

• Community-property state. Decide how you're going to file taxes--even if you're filing separately--without knowing your spouse's income, particularly if you live in a community-property state and you're not on good speaking terms.

• Itemize. Figure out if you have to itemize, even if you don't have deductions and your spouse does itemize--particularly if you're not sure what's going on your spouse's tax return.

Gathering the required documents and getting answers to these questions may take time, so get started now.

For more information, read "Collaborative Divorce Softens Sting of Split" in Home & Family Finance Resource Center.


Printed Thursday, October 16, 2008

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