Take advantage of tax breaks as a newly divorced person in Pennsylvania

Divorced couples in Pennsylvania need current and dependable tax information. Working with the right professionals makes all the difference.

With the beginning of a new year comes a period of tax preparation. If you divorced in 2019, then you should know which tax advantages you qualify for with your new status. Of course, you cannot go wrong with working with an accountant in Pennsylvania familiar with working with divorced clients. In the meantime, educate yourself on some of the most common tax breaks that you may qualify for as someone who is newly divorced.

Child tax credit

While working with your ex-spouse about custodial issues, discuss how to handle the child tax credit. Usually, the parent who has primary custody of the kids has the legal right to claim this specific credit. That said, the noncustodial parent can legally claim the credit for a child or dependent as long as the custodial parent waives the credit.

Alimony

As of 2019, those who pay an ex-spouse alimony cannot deduct the alimony amount from their taxes, nor is the alimony taxable for the spouse who receives alimony. When filing taxes, both ex-spouses need to report each other's Social Security numbers. That way, the IRS knows whether each taxpayer goes about claiming (or not claiming) the proper deduction.

Medical costs for children

Your son or daughter may have medical bills that you still need to pay in the new year. If so, you have the option of including those costs in the medical-expense deduction section while filing, no matter if your ex has custody of the kids. Something to bear in mind is that you can only deduct your child's medical costs if they are more than 7.5% of your adjusted gross income.

Filing status

Divorced individuals should pay attention to when their split became official. Couples can split but not yet officially divorce before the end of the previous year. If this is the case for your split, you can more than likely lower your tax bill by filing a joint return with your ex-spouse. Otherwise, you can choose the "married-filing-separately" option. If you officially divorced from your spouse by December 31st of last year, then you can file as either a single taxpayer or head of household.

IRA contributions

Touching back on alimony payments, they can tie into IRA contributions for tax purposes. Specifically, you can classify any taxable alimony you receive as an IRA contribution compensation.

Besides sitting down with a Pennsylvania financial professional familiar with working with divorced couples, you may also want to consider speaking with a legal professional about your post-divorce tax situation. When it comes to divorce and taxes, you can never have too much professional insight and advice.