Q. My divorce was finalized mid November...I do not work....how should my ex-husband and I file? We still live in the same house, although the kids and I are upstairs, he is downstairs...In our divorce decree, he gets to claim both kids as exemptions through 2010. As stated in the decree, he also must pay me temporary spousal support through Nov 2011. Does this payment have to be claimed as a type of alimony paid or received ...or does the fact that we still reside together in the same home exempt us from having to claim it either way? I guess the main question is how do we file for this year? How will I file beyond 2008, being as though I won't work, but will receive child support/temp. spousal support, all the while living in the same home?
A. Oh what a tangled web we weave...Your case is a complicated one and you definitely need to find a competent tax professional in your area to go over the details of your case to prepare an accurate tax return. In the eyes of the IRS, if you are not married on December 31st, you were not married at all for the year. You would file either single or Head of Household although I believe you are not eligible for the latter. Following is the definition of Head of Household filing status from the IRS website: 'Generally, you may claim head of household filing status on your tax return only if you are unmarried and pay more than 50% of the costs of keeping up a home for yourself and your dependent(s) or other qualifying individuals.'This would appear to be describing your ex-husband's situation more than yours. Secondly, court ordered 'spousal support,' which is a different way of saying alimony these days, is fully taxable income to the recipient and deductible by the payer. The IRS website has a very simple description of this on their website on this page. Because of the complexity of most divorce situations, there is even an entire publication devoted to this topic. It is called Publication 504 and is located here. Child support is never deductible. The answer to the taxability of the alimony payment has nothing to do with whether or not you are still residing in the same structure.