So It’s that time of year again – getting ready for taxes. If you are involved in a divorce, you 
have a new degree of complexity. We have some tips for you from Forbes, March 7 2013.
If you were divorced last year or are going through a divorce now, I’d like to offer six quick tips that will help you avoid paying higher taxes than necessary and potential penalties.
1. Be sure to select the right federal tax filing status. It’s based on whether you were married or single on the last day of last year.
If your divorce was finalized by year-end, file your taxes as a single person or, if you had a child and qualify, head of household status; head of household offers more tax advantages than filing as a single person. Otherwise, choose “married filing jointly.”
If you’re not yet divorced, you generally have two options: married filing jointly or married filing separately. Usually it’s better to go with jointly, advises Mark Luscombe, the principal federal tax analyst for the CCH tax advisory firm based in Riverwoods, Ill. “It tends to lower your taxes,” he says.
2. Claim an exemption for your child if you’re allowed. You may be eligible to lower your taxes by taking the dependent exemption for your son or daughter if you were divorced or legally separated last year. To do so, you must have been named the custodial parent in your divorce decree.
If you were the custodial parent in 2012, you may also be eligible for the child care tax credit and education tax credits.
In some cases, the custodial parent can give the dependent exemption to the non-custodial parent by filing the awkwardly titled IRS Form 8332: Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.
3. Don’t run afoul of the tax rules for child support. Neither you nor your ex can deduct child support payments you made. But child support you received isn’t taxed as income, either.
4. Avoid getting tripped up by the tax rules for alimony. If your ex-spouse paid alimony or gave you money each month to maintain your home and life, you’ll probably owe taxes on that income. Your former spouse can deduct the payments. The rules are reversed, of course, if you were the one paying alimony in 2012.
In general, if you were legally separated under a decree of divorce or separate maintenance in 2012 and you and your ex weren’t members of the same household when the alimony payments were made, the rules are the same.
Keep in mind that the IRS is strict regarding what qualifies as alimony and when the person paying it can write off the payments. Cash, checks or money orders meet the alimony test, but property does not.
Moreover, if you and your husband continued to share a residence after the divorce and he gave you alimony, you’ll owe taxes on those payments and he can’t deduct them.
5. Consider using alimony you received last year to fund a 2012 Individual Retirement Account. You generally need “earned income” to contribute to an IRA — and alimony qualifies. IRA contributions for 2012 can be made until April 15.
6. Get up to speed on how the recent tax law could affect your taxes. If you’re in the middle of negotiating a divorce agreement, some of the provisions in the law could send you over a fiscal cliff of a different kind. Take the time to learn how the law might impact your settlement agreement and negotiate accordingly.
Steven W. Hair, focuses his practice as a divorce attorney, family law attorney in Clearwater, Palm Harbor, and Safety Harbor.
For more information, visit our website at www.FamilyLawClearwater.com
or call (727) 726-0797.