On behalf of The Law Office of Gustavo E. Frances, P.A.
If you are filing for divorce, you may not be thinking about how this decision can affect your taxes. However, divorce can have a huge impact on your taxes and also on your finances. This is why it is important you hire an experienced Fort Lauderdale divorce lawyer to help you calculate the costs and make an informed decision.
Some Helpful Tips
- Child support: Child support is not taxable and the payments are not deductible.
- Spousal support you have received: Spousal support is taxable the year you receive it but it is not subject to tax withholding so you may have to pay more taxes throughout the year in order to avoid penalties.
- Spousal support you have provided: You can deduct spousal support. However, voluntary payments nonrelated to divorce aren’t deductible.
- Individual Retirement Account (IRA): It is possible to deduct contributions to your spouse’s IRA and your IRA.
- Name Changes: It is vital you notify the Social Security Administration about any name changes otherwise the name on your tax records will not match your SSA records causing further tax complications.
You are required to have healthcare coverage for yourself and dependents claimed on your tax return. If you lost coverage after divorce, you can enroll again during the established enrollment period. It is important you report any change in circumstances throughout the year, including marital status and other important aspects such as name change and change of address. If you and your former spouse still share the same policy, you may have to assign policy amounts on independent tax returns.
Preparing Your Taxes
Taxes are complicated and more so during a divorce. The first thing to consider is your filing status. The IRS only looks at whether you are married or not, the rest is history. Another important aspect to consider is whether you will claim your kids as dependents or not. Generally, the parent that spends more time with the children throughout the year can claim the children as dependents.
Division of Assets
Every couple’s financial situation is unique. Some decisions you make now will benefit you while others are not as beneficial, especially when filing your taxes. So what do you do? Dividing marital assets is already complex. Your taxes are calculated depending on how these assets are divided. This can be particularly difficult for wealthy couples. There are also some emotional aspects, which often interfere with the whole process making it even more difficult. To avoid any tax surprises, it is best you consult your attorney before filing for divorce.
Consult a Fort Lauderdale Family Law Attorney
Taxes can be complex to navigate on your own during and after divorce. If you are considering divorce, you should consult your family law lawyer to make sure you understand the tax implications and other important family laws that may apply to your specific situation when filing for divorce.