If you're currently going through divorce proceedings, many of your legal questions are likely being answered by your attorney. If you've obtained the services of an experienced family law attorney, then they've probably explained the rights afforded to you by law and how the process will proceed in the upcoming weeks or months.
But if you're like a lot of people, your sights might be set further - beyond the finalization of your divorce. Many want to know what will change for them after their marriage has officially ended, particularly if there are any legal ramifications that could affect their finances as well. In today's post, we'd like to take a look at your taxes, which is one of the biggest things to be affected by the dissolution of marriage.
Tax bracket. Because you're likely to no longer file a joint tax return, you could fall into a different tax bracket after your divorce becomes final. This is something to consider, particularly because things like alimony need to be claimed on your taxes, which can change your tax burden even more.
Home sale exemption. It's important to consider the sale of your house as well. Depending on the circumstances leading up to the sale of your home, you may be able to write off up to $250,000 of the sale. If you file a joint return, that amount doubles to $500,000.
Qualifying child exemption. Though child custody is determined by the state in most cases, divorcing couples should consider custody arrangements as they can have an effect on a person's taxes. Depending on who is considered the custodial parent or head of household, then the qualifying child exemption may be used, but only by one parent.
Though these are not the only financial impacts of a divorce, these are the big three in the realm of federal taxes. Today's readers should be aware of them as they could lead to different divorce negotiations in some cases.
Sources: Turbo Tax, "Tax Aspects of Home Ownership: Selling a Home," Accessed Dec. 7, 2015
The Internal Revenue Service, "Exemptions for Dependents," Accessed Dec. 7, 2015