Spouses in Kentucky going through divorce may be concerned about the financial implications of ending their marriage. From asset and property division to spousal and child support, divorce can have a major impact on the financial health of both partners. There is an additional financial change after divorce that is often left discussed: changes to tax filings as a result of the end of a marriage.
Changes to tax returns as a result of divorce can become apparent shortly after the divorce is final. If a divorce decree is finalized before Dec. 31 of a given year, it must be reflected on the filings for that year, which are due before April 15 of the next year. On the other hand, if the parties are not yet fully divorced by the end of December, those tax returns will continue to reflect a married filing status.
Tax credits for children can be another important aspect of post-divorce taxation for parents. The tax exemption for each dependent child can be claimed by only one parent. By default, the custodial parent or the parent with the majority of parenting time can claim the exemption. However, that parent can sign a waiver to allow the other to claim the exemption instead. This can be handled as part of the agreement in the divorce settlement and can include sharing multiple exemptions among parents with joint custody.
Other complex questions about taxation that can arise during and after divorce point to the importance of working with a family law attorney. From spousal support to the sale, transfer and division of real estate, retirement accounts and other assets, there can be tax impacts on a number of aspects after divorce. A lawyer may be able to provide representation throughout the divorce process as well as relevant counsel on related issues.