Just trying to get some things ready for consideration in a few months. Man what a year. Accrued some debts and working through payments on those, curious if I’ll be looking at a possible refund to help or if I’ll end up even further in the hole.
-Got divorced(filed January, finished in April.)
-Sold our house at a loss in May; we basically had to come up with $15k to get out of it.(don’t ask for reasons/logic here, it’s done and doesn’t matter.)
I guess my main questions off the top of my head:
1: Does divorce itself affect my tax situation? Like does it change my deductions for the year or do I get penalized somehow?
2: I’m assuming the 5 months of mortgage interest that I paid can only be claimed by one of us, and is something we need to work out between us? All of that paperwork is gonna go to me, and I’m the one who paid it to begin with. So this shouldn’t turn into an issue if that’s the case.
3: We only had that house for a year, so am I going to get absolutely hammered with a tax penalty or something? Again, sold at a loss, so not like we flipped it.
4: My tax bracket shouldn’t change much from previous years, I always make a little over $100k and she makes(made) around $30k. How would that play into the equation?
Colorado, as info.
Thanks and be gentle… 😅
Had a lot of life changes this year… how cooked am I when tax season comes?
byu/ThisGuyTrains intax
Posted by ThisGuyTrains
3 Comments
Not cooked, zero to worry about.
Selling a house at a loss will not change your tax liability.
The interest in your name can be yours but I get the feeling you take a standard deduction so it’s a non issue.
No tax penalties for divorce. Tax brackets are progressive, you’ll be fine.
Your standard deduction will be less filing single. You will be in the higher level of your bracket instead of lower level when you were married.
Your divorce was final in April, for that tax year you’re treated as **single** (or Head-of-Household if you qualify) so.. you can’t file joint for the year.
In terms of mortgage interest.. each of you may claim the portion you actually paid, even if the 1098 went to one of you , document who paid and split on Schedule A if itemizing.
Losses on a personal residence aren’t deductible, so that $15k won’t reduce taxable income
Since you’ll file separately (you single, she single), your bracket is driven by your own $100k, no joint shading. Consider gathering W-2s, 1098, closing statement, and your decree.
And cool, nothing is messed up!