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Updating the IRS On Your Status
While your relationship status may change from married to divorced, your obligation to pay your taxes will not change. However, how much you end up paying each year does change based on different factors, your relationship status included. If you get a divorce, there are a few key tax changes you will want to make upon completion of the process.
Filing Status
Perhaps most obvious, you will need to change your filing status from one of the “Married” statuses to “Single.” Since you are no longer married, you do not get to maintain the tax benefits of being married. Changing your filing status ultimately changes your tax brackets, which determine how much you pay in federal income tax each year.
It’s important to be aware that depending on what tax bracket you move into after your divorce, you could end up paying less or more in income tax. If you are unsure, it’s important to consult with a tax professional.
Tax Withholdings
Along a similar line, you may want to change your withholding status when your divorce is finalized. When you fill out a W-4 form, that determines how much money is withheld from your paycheck and paid to the IRS on your behalf. If you are at a single withholding, more is withheld from your paycheck than if you are withheld at the married level.
After your divorce, the change would be to switch your withholding from “Married” to “Single.” Be aware that making this change could ultimately lead to more taxes being withheld from your paychecks; however, this may lead to a smaller chance of owing the IRS when you file your tax return.
Ask Questions of a Divorce Attorney
If you are unsure of how to proceed with your tax changes or other financial changes after divorce, be sure to ask your divorce attorney to gain a better perspective on how to move forward. They can answer your questions or guide you in the right direction of how to gain the best answer. At Law Office of Mark M. Childress, our team is committed to helping our clients move forward through the challenges of their divorces and help them make the best decisions for their futures.
To learn more about our services or to schedule a consultation with a member of our Texas divorce attorney team, call us at (817) 497-8148 or visit us online. Law Office of Mark M. Childress does not provide tax or other financial advice. The material in this blog has been shared for informational purposes only and should not be relied on for financial advice or tax advice. Before making any changes to your finances, you should consult with your local tax professional.