New Mexico residents who divorce often find that their financial situation is radically different from when they were married. In addition to no longer having a joint income and the ability to share household expenses, a person’s tax situation often changes greatly as well. If people do not make changes to adapt to their new circumstances, they could end up having trouble making ends meet, owing the IRS a large amount of money or both.

When people who have divorced go to file their taxes, they may be surprised to find that they are no longer able to claim their children as a tax deduction and that their alimony payments are considered taxable income. Once divorced, only one parent is able to claim an individual child, and the child must be under the age of 18, even if they are still living at home. Someone who is receiving alimony and no longer able to claim any or all of their children could end up owing the IRS far more than they expected.

The IRS is very serious about collecting money owed, and people may be expected to sell belongings or borrow money to meet these obligations. Individuals may be able to work out a payment plan, but it is important to note that fees and interest will accrue on IRS debt, so it should be paid as quickly as possible to prevent the amount from becoming overwhelming.

A lawyer may be able to help people understand what to expect during and after the divorce process. Additionally, a lawyer could help someone make choices and create agreements that will benefit them financially in the long run.

Source: Huffington Post, “Divorce Is Taxing in More Ways Than One“, Amy Koko, June 07, 2013