First of all, divorcing couples may be interested to learn that so long as they were still married on the last day of 2014, they can still file jointly, even if their divorce is not yet finalized. If their divorce was finalized in 2014 and if a parent claims a child as a dependent, that parent may be considered to be the single head of household for tax purposes, which could give him or her a tax advantage. However, couples should keep in mind that only one of them may claim the child as a dependent for tax purposes.
401(k) investments also may be affected following a divorce. If a spouse withdraws funds from such an account as part of the property division process, that withdrawal could be penalized as an early withdrawal and will also be considered to be your income for tax purposes. By transferring funds via a Qualified Domestic Relations Order, both spouses may be able to side-step these tax issues.
Finally, deciding who gets the family home after a divorce also can have tax implications. The spouse who gets the house after a divorce as part of the property division process is the spouse who is allowed to deduct the mortgage interest. This is true, regardless of who is residing in the house or who is paying the mortgage.
These are only a few ways that a divorce will affect one’s tax return. For legal advice regarding divorce and taxes, which this post cannot provide, seeking professional help may be a good idea. Contact Baysingers Law to get free counseling from Divorce expert lawyer in Tulsa and Owasso.