Divorce and taxes

I am neither a tax professional nor a divorce lawyer, and I haven’t stayed at a Holiday Inn Express in years, so don’t take this post as advice. Rather, consider it a cautionary tale.

As far as our friends at the IRS are concerned, your marital filing status is whatever you are on 31 December. That is not what I thought; my understanding was that you could file as either married or single if your status changed during the year. With that in mind, I now face a much larger tax bill than I expected, or budgeted for, because now I am being taxed at the single rate for the entire year’s income… while simultaneously having had taxes withheld at the married rate.

So, a word to the wise. If you’re getting divorced, from a tax standpoint you will probably be best off if you have the divorce become effective as early in the year as possible. Don’t take my word for it, though. Read IRS publication 501, and consult an accountant. I wish I had.

Advertisements

Comments Off on Divorce and taxes

Filed under Musings, Oops!

Comments are closed.