Post-Divorce Tax Considerations
Solid Guidance on the Tax Implications of Your Divorce
Too many lawyers fail to consider the tax issues involved in divorce agreements. For many people, a divorce will represent the largest financial transaction in their life. You deserve a divorce lawyer that will carefully and thoroughly factor in the tax implications of every aspect of divorce, from the division of assets to child support.
With decades of hands-on experience in forensic accounting and finance and an experienced divorce lawyer in Brooklyn for more than 35 years, Attorney Curt Arnel is especially qualified to investigate and consider the tax issues involved in divorce. Our firm can crunch numbers and come up with many alternatives to show each client. We have sophisticated computer programs to produce scenarios that are convincing to both clients and judges.
Discuss the potential tax implications of your divorce with a qualified Brooklyn divorce attorney. Call 718-550-3024 to arrange your free consultation.
Examples of Divorce-Related Tax Issues
There are tax implications in every aspect of a divorce agreement. Here are some critical tax considerations you may need to consider as a divorcing couple:
- Tax filing status. Tax deadlines are unaffected by the status of your divorce case. If your divorce has not been finalized by the last day of the year, you'll need to determine whether to opt for a joint return for your upcoming filing or if "married filing separately" would be the better option for your situation.
- Tax credits. A dependent cannot be claimed by more than one person, which means that only one parent will be eligible for a Child Tax Credit. Whoever is granted physical custody of a child or children would likely receive the credit, but there may be valid reasons for the non-custodial parent to claim it instead.
- Retirement assets. A Qualified Domestic Relations Order (QDRO) allows a portion of a qualified retirement account to be designated to the other spouse without creating a taxable event.
- Spousal and child support. Paying spousal support affords tax deductions and deductible expenses. Child support, on the other hand, does not. So if you agree to pay more alimony and less child support, you can reduce your tax burden and still provide the same amount of total after-tax support. Additionally, if the recipient of either alimony or child support is in a low tax bracket, the net after-tax effect can be made better for both parties.
- Property transfers. The transfer of property during a divorce is generally a non-taxable event, but in some situations it may be wise to forego this tax-free treatment and create an intentional taxable event. This would allow the spouse purchasing the ex-spouses' share to benefit from a higher cost basis on the property.
- And much more
At Arnel Law Firm, we work hard to take such factors into account, structuring deals that are tax-advantageous for our clients and using a wealth of knowledge to the benefit of everyone involved.
Contact an Attorney Experienced in Divorce Tax Issues
You likely have more questions about divorce and tax issues. Arnel Law Firm is here to help. Visit our office in Brooklyn and discuss your situation during a free consultation. We serve clients throughout New York City, including Brooklyn, Manhattan, and Queens.
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