The Most Accurate Information When You File
Regardless of your marital status, you still have to pay taxes. How much you owe or may be refunded, however, may change upon finalizing your divorce. In order to provide the IRS with the most accurate information and ensure you are paying what you are supposed to in taxes, here are important tax considerations to keep in mind after your divorce.
The most obvious change you will need to make to your taxes is your filing status. Since you are no longer married, you will no longer be able to file “Married Filing Jointly” or “Married Filing Separately” and will have to file at the “Single” status. While this change might sound simple, you should also be aware that with the change to your filing status comes changes to the tax brackets you are in.
Taxpayers filing “Single” are in tax brackets that are roughly half the income of tax brackets for “Married Filing Jointly.” Be aware of what your income is and what tax bracket you will be moving to after your divorce.
Part of your paycheck is withheld from you and paid to the IRS on your behalf by your employer, and how much money is withheld depends on your tax filing status such as single or married. When you get a divorce, you will want to go to your employer to update your withholding status from “married” to “single.”
Typically, individuals who have a “married” withholding level end up having less taken out of their paychecks than individuals with withholdings at the “single” level since the tax brackets for those filing with that status are higher. When your divorce is finalized and you change your filing status, you should update your withholding, as well; failing to update your withholding status could result in insufficient tax payments that could result in owing the IRS when it comes time to file your tax return. If not enough is withheld, you could also face underpayment penalties.
Consult With Your Attorney
If you have questions about what your financial future will look like after your divorce or if you are unsure of your tax status, seek the advice of a qualified attorney who understands divorce law and can help you gain a clear picture of your life after divorce. At Verner Brumley Mueller Parker, our team can help you set proper expectations of what your situation will look like when your divorce is finalized and can give you peace of mind as we guide you to that next step.
To learn more about divorce in Texas or to speak with an attorney, call us at (214) 225-6766 or visit us online.