As we approach the deadline for filing personal tax returns, I will focus on tax-related issues in the context of divorce. To reiterate the following information is intended for educational purposes and you should speak with your CPA, Accountant or Tax Adviser before taking action.
If you are divorced with children your Separation Agreement or Judgment of Divorce likely will address who is entitled to claim the children as a dependent for tax purposes.
1. If you will not be claiming a child for tax purposes be sure to file Form 8332: Release / Revocation of Release of Claim to Exemption for Child by Custodial Parent. Take steps to ensure this form is properly completed as you do not want your tax returns to be denied or to miss out on this valuable tax benefit.
2. If your divorce agreement provides that the parties will alternate claiming the exemption keep in mind that you need to complete Form 8332 every time there is a change in the dependent deductions.
3. If you are in the process of a divorce and working towards negotiating a separation agreement you should speak with a CPA or other Tax Adviser and try to determine the value of the dependency and how it should be apportioned between the parties.
EXTRA TIP: If you recently executed a separation agreement and the judgment for divorce nisi has not become absolute, then you are still married and need to file either jointly or as married filing separately. If you are trying to file jointly and your spouse (soon to be ex-spouse) refuses to sign the joint return or cannot be located then unfortunately you will need to file married filing separately.
I strongly encourage that you carefully review your Separation Agreement or Judgment of Divorce to ensure that the correct spouse claims the child(ren) for tax related purposes as this issue is often the subject of a Complaint for Contempt.
I wish you all the best,
Scafidi, Juliano & Hurd, LLP
310 Washington Street, Suite 201
Wellesley, Massachusetts 02481
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