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Tax considerations for couples getting divorced

A number of things can change after divorce. One factor that people don't often think about is how their tax situation will be different when they are no longer married. Understanding the changes that are likely to happen could help couples in Maryland avoid mistakes that might cost them a lot of money.

Couples may want to choose the timing of their divorce based on the tax implications. For example, regardless of the day of the year the divorce is finalized, the two spouses must file their taxes separately for that entire year. This means that any deductions or credits they might have been eligible for as a couple will have to be reassessed to determine if one or both of them still qualify.

The mortgage interest deduction and child tax credit can only be taken by one of the former spouses. However, alimony paid as part of a court order may be deducted and either spouse might be able to claim eligible children as dependents. Alimony received is considered income and should be recorded on Form 1040.

Although there are no tax advantages for parents who pay child support, the parents might agree that the noncustodial parent can claim a deduction for the children if they financially support them. The custodial parent is generally eligible for deductions for children, but they may file Form 8332 to waive their right to take the exemption. In cases where the noncustodial parent fails to meet their obligations, the same form can be used to revoke the waiver.

Individuals who are considering divorce face a number of changes to their lives. They may be required to maintain a separate residence for a year prior to being able to file for divorce in Maryland. An attorney who has experience in family law may help a client through the divorce process.

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