Are you currently in the process of terminating your marriage or considering terminating your marriage? Either way, you may want to start considering all your options and planning ahead prior to year-end:
- How will you file your tax return for 2016? If you are married as of December 31, 2016, you will file as married filing jointly or married filing separately. If you are married as of December 31, 2016 and you have been separated for the last 6 months (spouse did not live with you), you may be able to file as head of household. If you are not married on December 31st of 2016, you will file as single or head of household. Filing as head of household is typically better financially, as you may be taxed at a lower rate. However, you must meet certain criteria to file as head of household (paying more than half the cost of maintaining your home, your spouse did not live there for the last 6 months of the year, a dependent lived with you for more than half the year, and if you are still married, your spouse must file as married filing separately). You should consult your tax advisor to discuss the options available to you.
- If you have children and/or you are still married and your spouse did not live with you the last 6 months of the year, track the nights your child/children spent at your home during the year so you may have the option as filing your tax return as head of household! Again, discuss with your tax advisor.
- If you make charitable contributions or have other large itemized deductions, can you postpone them until next year if you are still married and plan to be divorced in 2017? The itemized deduction(s) could be worth more to you in the year you are divorced.
At BRR Divorce Advisors, we are experts and leaders in the field of Divorce Financial Planning. Contact us today for an experienced and professional guide through your divorce and to help you consider all your options.
Amy Weldele, CFP®, CDFA™ Senior Wealth Manager