Tax Tips: Divorce and Name Changes; 5 Action Steps

Being in the tax season moment, my next few blogs will address some common tax issues and implications resulting from divorce. The first issue/implication I will write about are name changes. It is quite common for a spouse going through divorce to request a name change as part of the divorce process. Requesting a name change can occur for a variety of reasons, divorce being only one. This blog will not attempt to address the reasons but rather focus on actions to take when changing your name. You may be asking yourself what in the world does a name change have to do with my taxes? The answer is plenty. Here are five action steps to take:

1. Make sure you let your attorney know you want to change your name. It is quite easy for your attorney to order this when filing the divorce decree with the court. There are additional steps you must take to ensure a smooth transition by reporting the change to the appropriate agencies.
2. The best place is to start with the Social Security Administration. All the paperwork you need occurs when the court enters your divorce decree into the record. This includes the order for the name change. Changing your name with the Social Security Administration is necessary so your new name on IRS records will match up with your Social Security Administration record. Problems arise when processing tax returns and names do not match up. Save yourself some time and headache by reporting the name change to the Social Security Administration immediately upon order of the court.
3. Be sure to request a new Social Security card by filing Form SS-5, Application for a Social Security Card. Obtain Form SS-5 from www.ssa.gov or call 1-800-772-1213 to order it. You can also accomplish this by going to your nearest Social Security office. The new card will show your same social security number and your new name.
4. The next step is to notify your employer. If you have not already done so, complete a new W-4 for claiming withholding exemptions factoring your new tax filing status. Remember you will no longer be filing a joint tax return but rather you will be filing as a single individual or as head of household.
5. Here is a list of other entities to report your name change
   1. Department of Motor Vehicles for your driver’s license and update voter registration
   2. Passport amendment
   3. Health care exchanges If you purchased health insurance  through one of these, especially if you are receiving any type of subsidy
   4. Financial Institutions where you do business including banks, credit unions, investment companies, insurance companies, loan companies, credit card companies etc.
   5. Other businesses such as utility companies
   6. Notify the Post Office

Requesting a name change due to divorce is easy. It will save you time and money when completed as a part of the divorce process, rather than waiting until time has lapsed after the divorce.