Divorce can change the lives of the people involved in a number of ways. It can be such a stressful, time-consuming process that separating parties in Kentucky can overlook important issues in favor of simply getting through it. For example, divorcing parents may be so caught up in custody disputes that they may neglect to consider all of the tax ramifications of their separation.
Head of household can be a beneficial tax status for people are newly divorced; however, it is among the most difficult to qualify for. According to experts, filing as head of household is generally better than simply filing as a single person. The parent who has the kids for more than half the year can claim the head of household status. In addition, this individual can claim the child tax credit and other tax breaks.
Tax credits are especially valuable because they lower the person’s tax liability directly rather than just lowering taxable income. More specifically, a child tax credit in the amount of $2,000 saves the person $2,000 off of their taxes. Deductions, on the other hand, lower taxable income, so the savings from a $2,000 deduction will depend on one’s tax bracket.
The standard deduction for head of household filers in 2019 is $18,350. By contrast, people with single filing status get a standard deduction of $12,200.
A couple in Kentucky that is approaching or going through a divorce may want to speak with a lawyer. An attorney who has experience handling divorce cases might be able to help by distinguishing between separate and marital property or by identifying and locating the assets of the parties. A lawyer could also negotiate a property settlement with the other side or represent the client during family court proceedings.