If you started the divorce process in late 2019, you might wonder how it will affect your tax filing in 2020. As April approaches, you start receiving your tax documents and sending them to your accountant. But when do you and your former spouse no longer file as married?
Depending on when your divorce finalizes, the IRS may still expect you to put down that you are married. But you may have different options, even if you haven’t officially ended your marriage.
The IRS only recognizes divorce finalized before the end of the year
To file as unmarried, you must have finalized your divorce before December 31, 2019. Even if you are in the final stages, the IRS will look at your income as that of a married couple. However, if you officially divorce before the last day of the year, you will file as single.
Switching from joint to single taxes may lower your deductions
Your marital status can affect the deductions you claim on your taxes. Typically, your deduction nearly doubles when you file jointly as a married couple. But whether you file separately as single or married, the deduction can drop significantly. If you make more money than your former spouse, this can push you into a much higher tax bracket.
The head of household has extra benefits
You may be able to reduce this drop by claiming the status of head of household. You have a higher deduction limit than a single person. But you must be the primary caretaker of your children and contribute more to the bills for your house.
Even if you are still married, you can be head of household. As long as you no longer lived with your spouse as of May 31, 2019, you can claim this status on your 2020 tax forms.
Your marital status affects how you pay your taxes
Getting divorced has a significant impact on your finances. And as your finances change, the way you pay your taxes changes as well. Speaking with your accountant or financial adviser may help you understand how your divorce will specifically affect your taxes.