Divorce changes a lot of things and taxes are on that list. Newly divorced people should know how ending a marriage can affect their tax situation.
After getting divorced, a taxpayer should consider changing his/her withholding. Newly single taxpayers must give their employers a new Form W-4, Employee’s Withholding Allowance within 10 days. It is likely that the taxpayer may move into a lower tax bracket or reduce or eliminate Additional Medicare Tax. They can use the IRS Withholding Estimator on IRS.gov to help complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax for more information.
Filing status will change to single to file federal income taxes each year. Remember, if a taxpayer is single as of December 31, the law says he/she is single for the whole year for tax purposes.
All taxpayers should be aware of and avoid tax scams. The IRS will never initiate contact using email, phone calls, social media or text messages. First contact from the IRS generally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.
Author: Wayne M. Pecht, Esq.
Part of the Johnson Duffie Estate and Trust Planning Team