You are getting divorced, that much is certain. You know that the custody of your child will be decided and that various assets with be divided.
However, what does changing your tax status to divorced mean when filing your tax documents next April? There are a number of concerns of which you should be made aware.
Child Support vs. Alimony
Child support payments and alimony payments each have differing tax implications. By adjusting whether you are responsible for a higher alimony payment versus the child support payment, you can lower your tax liability. Knowing how to achieve this requires a divorce attorney who understands the various tax implications of alimony and child support.
Declaring Head of Household
When it comes time to file your taxes, you may be wondering whether you can file as the head of your household. Before you get too far, there are some factors to consider. First, you must file a separate return from your ex-spouse. Furthermore, you and your spouse cannot have lived together over the past six months. Also, you must have a dependent (child) living with you for more than six months of the calendar year. You may also be wondering if it is the best decision to file separately or together? A qualified tax attorney is able to review your complete financial situation and help you determine your options.
With shared custody, this topic can become very contentious. The intent of the tax law is to provide the greatest financial assistance to the person responsible for housing, feeding and clothing the child in question. With a 50/50 custody declaration, still only one parent can claim this exemption.
When it comes to property, most jurisdictions take into account all the assets of the couple filing for divorce. When preparing your taxes after the divorce is finalized, will you be prepared to handle the tax implications of splitting up all your assets? Having a knowledgeable pair of eyes to sift through the details is invaluable during this emotionally charged moment in your life.
An experienced divorce attorney can help you understand your options when going through your divorce and outline the potential tax implications going forward. Curt Arnel & Associates is a group of family and divorce attorneys well-equipped to assist you in assessing the many tax implications and burdens that are part of the divorce process.
When you have questions, reach out for answers tailored to your specific needs.