Divorce may lead to a change in filing status

Among other changes after a divorce, California couples who are ending their marriage may find that their tax situation is different. For instance, an individual who gets divorced during the current calendar year will usually file single. This is true regardless of how much time he or she spent married during that year. It may be important for parents to determine who will have access to the child tax credit as well as the dependent credit.

The dependent credit is worth $4,050 per child, but only one parent can claim it. In most cases, the custodial parent is the one who gets it. However, it is possible for noncustodial parents to be given that credit. If a noncustodial parent does claim that credit, both parents will need to fill out Form 8332, and the noncustodial parent will need to file it with his or her tax return.

Those who had a complicated tax return prior to getting a divorce may discover that they have an even more complicated return after doing so. It may be a good idea to talk with a financial adviser or tax planner prior to filing a return. This may reduce the odds that a person gets an audit that could add stress or financial difficulty to his or her life.

Whether a divorce is resolved through mediation or though some other method, it may be helpful to consult with an attorney who can review the terms of any agreement reached outside of court in an effort to determine if it is in the best interests of the client. Counsel can also advise a client as to the tax implications of the agreement.