TAX ISSUES WOMEN SHOULD UNDERSTAND WHEN GETTING A DIVORCE

Divorce legal issues often go beyond state lines and apply to every couple contemplating the end of a marriage. People in Texas and throughout the U.S. who are getting a divorce must bear certain factors in mind when it comes to their taxes and the status under which they file. Knowing the issues that will affect their taxes is key to a smooth transition from married to single. Women are particularly vulnerable in certain situations and they need to protect themselves.

The change from filing as a couple to filing singly has simple rules. The marital status as of December 31 of the previous year is what determines how to file. When the divorce is finalized, there are two alternatives: single or head of household. Home ownership deductions come up if the home is retained by the female spouse, but the mortgage is shared between the former couple. Deductions for interest on the mortgage and who will pay the real estate taxes could come into question.

When there are children from the marriage, there could be a dispute as to which parent is claiming the child as a dependent. It will not necessarily be the custodial parent who gets to make the deduction. The amounts that can be deducted change annually. In some cases, the parents will agree to share the deduction 50-50. In others, they alternate years. Child-care credits are limited to the custodial parent. Income and the estimation of tax payments might be a consideration. For the vast majority, the income will change after the marriage is over due to support, a new job and other factors. There are different tax concerns that go along with this.

Finally, investments are often part of a couple’s portfolio. It can be complicated to transfer these as part of a divorce agreement without having to pay taxes and penalties. This is also the case with retirement accounts. To shield oneself from being penalized simply through the decision to divorce, it is imperative to have legal help that is experienced in a wide array of divorce legal issues. Discussing these matters in depth with an attorney who is aware of the divorce process and its aftereffects is the first step to grasping every aspect of a case.

 

Source: wtop.com, “5 things women should know about taxes after a divorce,” Dawn Doebler, March 22, 2017

2017-08-11T18:28:48+00:00 March 29th, 2017|Divorce|