What You Should Know About Divorce And Taxes
Like most aspects of life, divorce has important tax implications. In fact, the tax consequences may drastically shape the outcome of the case. Any settlement or divorce decree must take into account the tax ramifications of a proposed division of property.
As federal income tax law continually evolves and changes, the tax implications of divorce become more complex. Ignoring those implications can lead to disastrous outcomes.
Some common tax considerations stemming from divorce include:
- Spousal support (alimony) and child support: If you receive alimony or child support, you need to know whether you must include it as income on your tax returns. Conversely, if you must pay alimony or child support obligations, you need to know whether you can deduct them. The answers to these questions generally depend on the provisions of the divorce decree or separation agreement.
- Child dependency exemption: Which parent will have the right to claim a tax exemption? Generally, the answer will depend on the custody arrangement.
- Property division: When property is transferred between spouses, important tax implications may arise, particularly when the property is a business interest, stock portfolio or other income-producing asset. One or both parties may be liable for capital gains or losses.
- Filing status: In some cases, questions may arise regarding filing taxes after divorce or separation. Should you file joint or separate tax returns? The answer generally depends on the timing of the divorce decree and other considerations. Likewise, this is an important issue for couples who are legally separated but not yet divorced. A related question revolves around which party can file as head of household.
These and other tax issues can seem overwhelming, particularly when added to the already daunting prospects of navigating the legal issues surrounding divorce or separation. Fortunately, you don’t need to tackle them on your own.
Get A Clear Picture Of What To Expect
For legal assistance in navigating divorce and taxes, contact Anoka County lawyer Joseph E. Marvin at Marvin Law Office, L.L.C. Our firm offers experienced guidance to help clients overcome legal obstacles in family law cases. Our attorney regularly works with accountants, tax advisers and other trusted professionals to help clients resolve complex tax issues.
When facing divorce, you deserve to know what to expect at the outset. Our firm will help you obtain a clear picture of how your case will proceed, including the tax implications. You can rest assured that important tax matters will not be overlooked.
Contact An Alimony And Taxes Attorney
Get experienced legal guidance in navigating complex divorce matters by contacting us. Based in downtown Anoka, Minnesota, we represent clients throughout the area.