Your Tax Questions Answered
Handling Divorce and Taxes
Kiplinger editorial director Kevin McCormally and fellow tax experts Peter Blank and Mary Beth Franklin tackle your most pressing tax challenges.
By Kevin McCormally, Editorial Director, Kiplinger.com
February 12, 2010
QUESTION: I got legally divorced in July and my accountant hinted that I would have to file as a ‘single’ tax filer for the entire year – even January-through June when I was still married. True?
KEVIN ANSWERS: Your accountant is correct. Your marital status on December 31 controls your filing status for the full year. (An exception is for married couples, when one spouse dies during the year; in that case the survivor still files a joint return for the year of the spouse’s death.) So, if you were divorced in July, file as a single person…unless you qualify as a head of household. You might find IRS’s publication 504 helpful.
QUESTION: Upon my divorce two years ago I sold my home to my spouse and want to buy a new home. Will I qualify for the long-time resident credit?
KEVIN ANSWERS: To be eligible you must have owned and lived in a principal residence for a continuous five year period during the eight years leading up to the purchase of your new home. So, if you owned and lived in the house for at least five years before the divorce two years ago the, yes, you could qualify for the credit.
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Reader Comments (7)
Posted by: Christina at 02/18/2010 12:41:12 PM
Due to a divorce, we sold a home that I lived in for 20 years in August, 2009 and I bought a less expensive home and closed on October 25, 2009. Do I qualify for any of the home buyer credits?
Posted by: Carmen at 02/26/2010 08:39:17 PM
I am a divorcee, I have no pension throughout my marriage for 20 yrs. Am i qualified for ex spousal ss benefits if i turned 62 yrs old? I also have a home by default of marriage. Can you explain to me about home buyers credit? And if so how can i go about in filing. pls. guide. Thank You...
Posted by: ace at 02/26/2010 10:30:22 PM
i believe u are wrong on this ina community property state. u must split all net income, and any tax paid into irs up thru the divorce decree date. not sure about non-business deducts. (sch. a items)
Posted by: Linda at 03/07/2010 10:56:53 PM
Alimony/claiming home taxes: I was divorced Oct 2008, he remained in the house until the end of May 2009. The money he gives for alimony is used to pay my portion of the house payment less 200.00. Do I have to claim all the alimony he has given for the full year since he lived here through May? The house is in both of our names but the mortgage is only in his name. I live in the home and as mentioned he lived her through May, can we split the house taxes and both claim or does he only get to claim the house or do I get to claim the house since I am living here. Also can we get the long residence credit, we have owned the home since 1996. Thanks Linda
Posted by: Stephen at 06/04/2010 04:00:47 PM
Really is important that you know exactly what's going on in a divorce. The easiest way to avoid unnecessary fees and tax penalties that can occur during an emotional time. -Stephen
Posted by: Norma at 07/22/2010 03:35:52 PM
In the case of divorce what should a woman having been married 30 years do regarding husbands IRA? What are the tax tax implications in NJ and Fed? Can it be rolled overinto the her individual or should it be left in place until age 59 1/2. Thanks for any informations you can give.
Posted by: Debbie at 07/25/2010 01:24:25 AM
You might need to look into this: Qualified Domestic Relations Orders : A QDRO is a legal document, signed by a judge, which divides someone's retirement accounts or benefits as part of a divorce. QDRO drafting can be done by a professional or a lawyer. In many marriages, the husband's and/or wife's pension or 401(k) is one of their most significant marital assets. Sometimes, it's the only asset of any real value. So, it will be important to handle the distribution of those retirement funds appropriately in the divorce action.