This is one of the painful facts of life that we feel we need to dedicate a newsletter to. You may feel certain it will never happen to you, nevertheless it cannot hurt anyone to be better informed about the tax implication a divorce incurs.

If you were recently divorced and changed back to your previous last name, you’ll need to notify the SSA of this name change. Informing the SSA of a name change is easy; you’ll just need to file a Form SS-5, Application for a Social Security Card, at your local SSA office and provide a recently issued document as proof of your legal name change.

Form SS-5 is available on SSA’s website at http://www.socialsecurity.gov, by calling 800-772-1213 or at local offices. Your new card will have the same number as your previous card, but will show your new name.

Once this settled, the next step is to determine your filing status.

If you are unmarried for the entire year you can file as unmarried if you have obtained a final divorce decree or annulment by the last day of that tax year. You may also qualify for the special "head of household" filing status if you have a final divorce decree, annulment or have separated from your spouse for the majority of the tax year. You can also choose to file joint returns if you are separated, but not formally divorced. Taxpayers filing as head of household earners benefit from a higher standard deduction amount than their counterparts who file as married filing separately on their tax returns. Of course, if there are no dependents things get much simpler to deal with and the filing status is obviously unmarried.

However, it also results in both parties being liable for 100 percent of any future tax due as a result of an IRS audit. If your spouse is unable or unwilling to pay any part of the resulting tax liability, IRS will hold you responsible for the entire balance.

Fill out and file a new W-4 form with your employer, reflecting your post-divorce tax filing status. Do this as early as possible in the year you expect the divorce to be final, so federal and state tax will be withheld at the correct rates.

If there are children involved, the IRS generally allows the custodial parent to claim a qualifying child and take the standard exemption for the dependent child.

The IRS uses a residency test to determine the custodial parent status. Under this test, the custodial parent is the parent who lives with the child for a greater number of nights during the tax year. For tax purposes, the number of nights begins accumulating on January 1 and ends on December 31.

There are special tax rules when a child is absent due to sleepovers or when the parent must work at night. In these instances, the parent still receives the credit for the night.

Concerning alimony and child support, remember that received alimony is considered as income and paid alimony as a deduction. You may need to check your decree to know which payments were alimony or child support. Child support is neither taxable nor deductible. IRS considers child support to be paid first, followed by alimony, if more than one type of payment has been awarded.

Also, the custodial parent may claim the dependent-care credit, which reimburses working parents or parents enrolled in school for part of the costs associated with child care. Custodial parents are also the only ones who can claim the earned income tax credit, or EIC, which reduces the tax bill for working taxpayers with low incomes. In fact, if you qualify for and claim the EIC, you may not only eliminate tax liability altogether, but also may even receive a refund from the IRS.

If you itemize deductions, there are some attorney fees that can be tax deductible:

Property transfers between spouses are governed by I.R.C. 1041. The general rule is that no gain or loss is recognized on a transfer of property from an individual to a spouse or former spouse; but in the case of a former spouse, no gain or loss is recognized only if the transfer is incident to a divorce. A transfer of property is incident to a divorce if the transfer (1) occurs within one year after the date on which the marriage is dissolved, or (2) is related to the cessation of the marriage. The temporary regulations provide that transfers related to the cessation of marriage must be pursuant to the divorce or separation instrument and must occur within six years of the date the marriage ends.

Transfers of property prior to marriage are not covered by I.R.C. 1041. Pre-marriage transfers of property pursuant to the terms of a prenuptial agreement will result in the recognition of gain or loss.

Where the spouse transferor is a nonresident alien, the Code states that the general rule in 1041(a) does not apply.

Maybe even more important than all is to seek specialized legal and tax advice from professionals, as tax laws may frequently change and a seemingly small issue can turn into a real problem.