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Tax Considerations If You Divorced In 2021

If your marriage ended in 2021, your tax return may look a bit different this year. Understanding how your taxes may change after divorce can help you avoid costly errors.

Review the important tax considerations for newly divorced individuals as April 15 approaches.

Completion date

If you filed for divorce last year but the court has not yet finalized the end of your marriage, the IRS still considers you a married couple in 2022. You must file your taxes together or married filing separately. If your divorce became final in 2021, you must file 2021 taxes as a single person or as the head of the household if you have a dependent who resides with you at least 50% of the time.

Child tax credits

Americans received advance payments of the 2021 child tax credit from July to December. Families receive a total of $3,600 per child 5 or younger and $3,000 per child ages 6 to 17. The parent with primary custody has the right to these tax credits.

However, he or she may sign a waiver to allow the other parent to claim this tax benefit. If you pay a portion of your child’s medical bills after divorce, you may be able to deduct these costs on your tax return even if the child’s other parent has the right to claim them as a dependent.

Capital gains tax

Did you decide to sell your home or other assets in the course of the divorce? You may have to claim the resulting income as capital gains, which will impact your tax liability.

A tax professional or certified public accountant can help you ensure you are making the right financial moves after divorce.