Why do people get divorced? Well, the reasons are many, but we can probably agree that the foundational goal of any divorce is for the spouses to disentangle from one another. There may be matters, such as child custody and visitation, that will keep divorcing spouses connected for years to come, but there are other ways in which soon-to-be exes in New York may want to completely sever ties as quickly as possible: for example, with regard to taxes.
The last joint tax return a divorcing couple files can get ugly if both spouses aren’t careful. If, for instance, one spouse has traditionally handled financial and tax matters, then the other spouse should probably get familiar with these issues sooner rather than later. A tax-knowledgeable spouse may be in a position to legally move money around to reduce his or her tax burden while increasing the other spouse’s.
There are ways, however, of minimizing the tax burden for both spouses.
Also, if you have filed jointly in the past, you shouldn’t necessarily assume that your tax-knowledgeable spouse will file jointly in the last year of your marriage. In short, you don’t want unpleasant surprises.
With that said, it is generally a good idea for each spouse to consult with an attorney about tax issues and develop a strategy for the equitable distribution of assets and debts.
Some tax-related issues to consider in the division of marital property:
- Joint bank accounts
- Separate property
- Real estate
- Retirement accounts
- Spousal support
To learn more about tax issues and divorce, please visit our family law website.
Source: Forbes, “Post Divorce Tax Intimacy Can Be Riskier Than Post Divorce Sex,” Peter J. Reilly, Jan. 7, 2014