34 THE QUEENS COURIER • OCTOBER 5, 2017 FOR BREAKING NEWS VISIT WWW.QNS.COM
Divorce or Separation May Affect Taxes
BY JOHN SAVIGNANO, CPA
Taxpayers who are divorcing or recently
divorced need to consider the impact
divorce or separation may have on their
taxes. Alimony payments paid under a
divorce or separation instrument are
deductible by the payer, and the recipient
must include it in income. Name or address
changes and individual retirement account
deductions are other items to consider.
IRS.gov has resources that can help along
with these key tax tips:
• Child Support Payments are not
Alimony. Taxpayers can deduct alimony
paid under a divorce or separation decree,
whether or not they itemize deductions
on their return. Taxpayers must file Form
1040; enter the amount of alimony paid and
their former spouse’s Social Security number
or Individual Taxpayer Identification
Number.
• Deduct Alimony Paid. Taxpayers should
report alimony received as income on Form
1040 in the year received. Alimony is not
subject to tax withholding so it may be necessary
to increase the tax paid during the
year to avoid a penalty. To do this, it is possible
to make estimated tax payments or
increase the amount of tax withheld from
wages.
• Report Alimony Received. Taxpayers
should report alimony received as income
on Form 1040 in the year received. Alimony
is not subject to tax withholding so it may
be necessary to increase the tax paid during
the year to avoid a penalty. To do this, it is
possible to make estimated tax payments or
increase the amount of tax withheld from
wages.
• IRA Considerations. A final decree of
divorce or separate maintenance agreement
by the end of the tax year means taxpayers
can’t deduct contributions made to a former
spouse’s traditional IRA. They can only
deduct contributions made to their own
traditional IRA.
• Report Name Changes. Notify the Social
Security Administration (SSA) of any name
changes after a divorce. The name on a tax
return must match SSA records. A name
mismatch can cause problems in the processing
of a return and may delay a refund.
Moving Expenses May Be Deductible
Taxpayers may be able to deduct certain
expenses of moving to a new home because
they started or changed job locations. Use
Form 3903, Moving Expenses, to claim the
moving expense deduction when filing a
federal tax return.
Home means the taxpayer’s main home.
It does not include a seasonal home or other
homes owned or kept up by the taxpayer
or family members. Eligible taxpayers can
deduct the reasonable expenses of moving
household goods and personal effects and
of traveling from the former home to the
new home.
Reasonable expenses may include the
cost of lodging while traveling to the new
home. The unreimbursed cost of packing,
shipping, storing and insuring household
goods in transit may also be deductible.
Who Can Deduct Moving Expenses?
1. The move must closely relate to the
start of work. Generally, taxpayers can consider
moving expenses within one year of
the date they start work at a new job location.
2. The distance tests. A new main job
location must be at least 50 miles farther
from the employee’s former home than the
previous job location. For example, if the
old job was three miles from the old home,
the new job must be at least 53 miles from
the old home. A first job must be at least
50 miles from the employee’s former home.
3. The time tests. After the move, the
employee must work full-time at the new
job for at least 39 weeks in the first year.
Those self-employed must work full-time at
least 78 weeks during the first two years at
the new job site.
Different rules may apply for members of
the Armed Forces or a retiree or survivor
moving to the United States.
Here are a few more moving expense tips
from the IRS:
• Reimbursed expenses. If an employer
reimburses the employee for the cost of a
move, that payment may need to be included
as income. The employee would report
any taxable amount on their tax return in
the year of the payment.
• Nondeductible expenses. Any part of
the purchase price of a new home, the cost
of selling a home, the cost of entering into
or breaking a lease, meals while in transit,
car tags and driver’s license costs are some
of the items not deductible.
• Recordkeeping. It is important that
taxpayers maintain an accurate record of
expenses paid to move. Save items such as
receipts, bills, canceled checks, credit card
statements, and mileage logs. Also, taxpayers
should save statements of reimbursement
from their employer.
• Address Change. After any move,
update the address with the IRS and the
U.S. Post Office. To notify the IRS file Form
8822, Change of Address.
Avoid scams. The IRS does not initiate
contact using social media or text message.
The first contact normally comes in
the mail.
John Savignano is a partner with
Savignano Accountants & Advisors
located at 47-46 Vernon Blvd., Second
Floor, in Long Island City. If you have
any questions or require additional
information, please call John at 718-
707-0955.
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