Separation and or Divorce may affect your Taxes.

Taxpayers who are divorcing or recently divorced need to consider the impact divorce or separation may have on their taxes. Alimony payments paid under a divorce or separation instrument are deductible by the payer, and the recipient must include it in income. Name or address changes and individual retirement account deductions are other items to consider.

 

Account On Us has resources that can help along with these key tax tips:

 

  • Child Support Payments are not Alimony.Taxpayers can deduct alimony paid under a divorce or separation decree, whether they itemize deductions on their return. Taxpayers must file Form 1040; enter the amount of alimony paid and their former spouse’s Social Security number or Individual Taxpayer Identification Number.

 

  • Deduct Alimony Paid.Taxpayers should report alimony received as income on Form 1040 in the year received. Alimony is not subject to tax withholding so it may be necessary to increase the tax paid during the year to avoid a penalty. To do this, it is possible to make estimated tax payments or increase the amount of tax withheld from wages.

 

  • Report Alimony Received.Taxpayers should report alimony received as income on Form 1040 in the year received. Alimony is not subject to tax withholding so it may be necessary to increase the tax paid during the year to avoid a penalty. To do this, it is possible to make estimated tax payments or increase the amount of tax withheld from wages.

 

  • IRA Considerations.A final decree of divorce or separate maintenance agreement by the end of the tax year means taxpayers can’t deduct contributions made to a former spouse’s traditional IRA. They can only deduct contributions made to their own traditional IRA. For more information about IRAs, see Publications 590-A and 590-B.

 

  • Report Name Changes.Notify the Social Security Administration (SSA) of any name changes after a divorce. Go to gov for more information. The name on a tax return must match SSA records. A name mismatch can cause problems in the processing of a return and may delay a refund.

 

Account On Us offers many services for individuals such as income tax preparation, estate tax preparation, gift tax preparation, IRS inquiries, audits and tax planning. If you have a personal tax or accounting need, please contact Osceola County’s most trusted accounting service, tax preparation and payroll service provider. Call us today at (407) 892-1066 or contact Account On Us today! We are here to help!

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