How Divorce Affects Taxes
Taxes have a major impact on nearly every aspect of life, including divorce. However, some couples become so angry at one another, they lose sight of a common enemy, the International Revenue Service. For those who are considering, or are already in the process of getting a divorce, it is important to know what your tax filing status is determined by as it pertains to marriage and divorce. If your divorce was final anytime before December 31st, you must file as single or head of household for that year. If your divorce proceedings and paperwork aren’t complete by December 31st, then as far as the IRS is concerned, you are still married. In this case, you and your spouse can file your tax returns as married filing jointly. Under this filing status, you report all of your income together. This allows you to claim all the deductions, exemptions, or credits to which either or both of you are entitled. When deciding whether to file jointly, consider not only the resulting tax liability, but also the ramifications of being jointly liable for the taxes, penalties, and interest of your spouse. Because your divorce is still pending, you must consider the overall tax implications. Hiring a good family law attorney can be very beneficial with this process. With the use of a diligent divorce attorney and tax accountant you may be able to minimize your total tax liability and avoid being blindsided by tax penalties. Ignoring the tax consequences of a divorce could turn a seemingly fair settlement into one that is financially disastrous. The settlement agreement should be worded and calculated correctly, with the ultimate goal being to reduce the taxes paid by both spouses, leaving them both financially secure. With the right divorce attorney, this can all be accomplished. A good family law attorney will put the needs of the client first. He or she will take a step back and look at the total picture, and will understand that fighting blindly for the client isn’t what’s always what’s best for the client in the long run. A good family law attorney will understand that clients can sometimes let their emotions cloud their judgment, so they will help them make the best decisions for their client’s long term future. Choose the family law attorneys with the qualities you can trust. Lawyers play big roles in our lives, and the lawyer you choose to handle your divorce will obviously affect the course of your life as well as the lives of your family members. Taxes are inherently complicated, and can become outright confusing and stressful when marital status is changing. The right lawyer, who is well versed and able to guide you or refer you to tax experts as needed, can help the transition from being married to being divorced go as smoothly as possible.