Many women will be forced to deal with a divorce at some point or another. While this might seem like the end of the world, you should remove this opinion your mind and try to think of a brighter future. Once you’ve managed to settle into the role of a single mother, you will quickly find that your life is actually better in some regards.
Your home will be much calmer and your child won’t be forced to watch arguments and fights almost every day. Nonetheless, there are some responsibilities you will need to confront. Below, you will learn about single moms divorce and taxes.
Understanding Child Support
First and foremost, you should realize that most single mothers will be entitled to assistance from their spouses. Your ex-husband will most likely be required to provide you with some type of child support. This monetary assistance will prove to be immensely helpful and it’ll give you the ability to provide your child with a better life.
One thing to remember is that child support is actually tax-neutral. This is true regardless of the value of the check you receive each month.
While alimony is paid by your spouse, it is paid to you and not to your child. With this in mind, you should know that the IRS will actually consider IRS to be an income of sorts. Therefore, your spouse will be able to use the alimony payment as a deductible and you will be responsible for paying taxes on that income.
However, it is sometime possible to change this rule in your initial separation agreement. You may be able to convince your ex-husband to make the payments nondeductible and this will allow you to avoid paying taxes on the money.
The Marital Home
If you and your former significant other owned a home together, you’re going to have another dilemma on your hands. It may be possible to accept payment for your half of the property. In most cases, this money will be taxable.
However, if you’re unable to come to an agreement with your spouse, it may be best to sell the property. Just remember that the owners of the property will be taxed on the income obtained from the sale. If you sell the property with your spouse, it is essential to make sure you pay the owed taxes in a timely manner.