The tax consequences of separation and divorce can affect a number of areas. If you are separated or newly divorced tax time can be a confusing time. One area in particular is the deduction for dependents. For instance, did you know that, even if your final decree gives you the right to claim your child as a dependent you still need special permission from the IRS?
Ever heard of a "form 8332?" Is the child support you pay taxable? How about alimony, do you get a deduction if you pay alimony? These are just a few questions that will come up at tax time.
Are you a non-custodial parent whose divorce decree states you can claim your child? On the other hand, maybe you are recently divorced and not sure how to handle your taxes. To help protect yourself at tax time there are a few questions you should consider during the divorce settlement process and after divorce.