Divorce will affect your taxes in Missouri

Any significant change in finances or living situations can affect taxes for the year. Divorce is no different. In Missouri, there are a number of ways in which a divorce will affect those taxes and alter how taxes are filed for both parties.

Those in the middle of a divorce can file as married or as married filing singly. They may even file as single. However, divorcing couples should consider the tax bracket and if filing singly or jointly will put them at the top of a certain bracket, which means paying more in taxes generally. If there seems to be tax troubles with one party, filling separately may be the best way to steer clear of those issues as one starts anew.

If there are children involved or alimony ordered, that ruling will affect taxes also. Typically, the parent who has the child the majority of the time will get the dependency credit pertaining to taxes, but some parents opt for alternating who claims the child from year to year. Alimony payments are taxable for the receiver and tax deductible for the payer, which can greatly affect the bottom line of a tax return after a divorce.

As with all financial changes that will accompany a divorce, the outcome of taxes the first year of that divorce is something each party can benefit from understanding beforehand. Discussing issues such as how each person will file, total amount of alimony and who will claim the children is part of the process before any divorcing party files taxes in Missouri. These tax decisions can be listed in a divorce settlement.

Source: onwallstreet.com, “8 ways to make divorce less taxing“, Ingrid Case, June 6, 2016