SOME TAX CONSIDERATIONS FOR PEOPLE WHO ARE SEPARATING OR DIVORCING

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.

Understand the tax treatment of alimony and separate maintenance:  For federal tax reasons, amounts paid to a spouse or former spouse through a divorce decree, a separate maintenance decree, or a signed separation agreement may be considered alimony or separate maintenance payments.

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 50/50 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.

If necessary, report property transfers and consider your filing status:

• Married filing jointly

• Married filing separately

• Head of Household

• Single

This document is designed for general information only. The information presented on this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed here: 📧kevin@kmckernan.com or 📞718-317-5007