Saturday, August 20, 2022
Divorce will change your income tax filing status. Filing status is used in determining whether a taxpayer must file a return and the amount of the standard deduction. Filing status is also used in calculating a taxpayer’s income tax. If a divorce is not finalized by the end of the year, the divorcing couple must decide whether to file a joint tax return. Both the taxpayer and spouse must understand that when filing a joint tax return each is separately and individually liable for the tax due.
Alimony or separate maintenance payments under a divorce or separation instrument executed after 2018 is no longer deductible by the payer. In addition, the recipient does not have to include alimony received as income.
Generally, there is no gain or loss on property received in a divorce. However, there can be significant income tax consequences when property received in a settlement is sold.
Read more here.