DIY Divorce in Florida

Florida Divorce & Taxes - Alimony vs. Child Support

We continue the divorce and taxes theme here at DIY Divorce in Florida with the two top alimony rules.

• Alimony is taxable as income to the recipient but child support is not.
• Alimony is deductible for the paying spouse but child support is not.

If you received alimony this year, you will have to pay taxes on it. If you calculated a specific amount for alimony, you may have had to "gross up" the amount to cover taxes.

Because of this tax issue, you may want to consider alternate spousal support ideas that may be more tax beneficial. For example, you may want the family home as your settlement instead of a series of monthly payments. You won't pay income tax on the home like you would if you received monthly alimony payments. Plus, your mortgage interest will be deductible and you could build equity once the market stabilizes.

Florida Divorce & Taxes - Head of Household

Divorce can make filing taxes confusing. We will review some common tax and divorce issues between now and the New Year. Remember that the general rule is that your tax filing status is determined by your situation on December 31st.

 Today we start with HEAD OF HOUSEHOLD status.

You can claim Head of Household status if you are unmarried (single, legally separated or divorced) and provide a home and at least 50% of the care of at least one dependent. Note that Florida does not have 'legal separation.'

Even if you were not divorced or legally separated at the end of the tax year, you can claim Head of Household if all of the following apply:

• you lived apart from your spouse for the last six months of the tax year, AND
• you file a separate tax return from your spouse, AND
• you paid over half the cost of keeping up your home for the tax year, AND
• your home was the main home of your child, stepchild, or foster child for more than half of the tax year, AND
• you can or could claim (under the rules for children of divorced or separated parents) your child as your dependent.

Because this status requires that you file a separate tax return, this is one situation when you want to be sure you take advantage of the best way to file your taxes.