Tips On The Tax Effects Of Divorce Or Separation

Income tax may be the last thing on your mind after a divorce or separation. However, these events can have a big impact on your taxes. Here are some key tax tips to keep in mind if you get divorced or separated.

Child support
If you pay child support, you can't deduct it on your tax return. If you receive child support, the amount you receive is not taxable.

If you make payments under a divorce or separate maintenance decree or written separation agreement, you may be able to deduct them as alimony. This applies only if the payments qualify as alimony for federal tax purposes. If the decree or agreement does not require the payments, they do not qualify as alimony. If you get payments that qualify as alimony, they are taxable in the year you receive them. You may need to increase the tax you pay during the year to avoid a penalty by making estimated tax payments or increasing taxes withheld from your wages.

Spousal IRA
If you get a final decree of divorce or separate maintenance by the end of your tax year, you can't deduct contributions you make to your former spouse's traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.

Name changes
If you change your name after your divorce, notify the Social Security Administration (SSA) of the change. File Form SS-5, "Application for a Social Security Card." You can get the form at or call (800) 772-1213 to order it. The name on your tax return must match the SSA records. A name mismatch can delay your refund or cause other correspondence from the IRS.

This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use. The information contained in this newsletter was not intended or written to be used and cannot be used for the purpose of (1) avoiding tax-related penalties prescribed by the Internal Revenue Code or (2) promoting or marketing any tax-related matter addressed herein. © 2015