November 10, 2012 /24-7PressRelease/
-- Divorce and Taxes: How a Separation Impacts Tax Filings
Getting a divorce or separation marks the end of more than just a personal relationship. In addition to dealing with the emotional turmoil of determining where children go, whether to sell the house and even who keeps the pets, a couple is also ending a financial partnership.
As a result, it is important that those going through a separation are aware of the tax implications tied to divorce.
A Few Big Tax Concerns
Divorce impacts many areas of taxes, including:
-Child support payments
The first thing to determine during tax season is what status to choose: married or unmarried. If the final decree of divorce is received prior to the last day of the tax year, the person filing is considered unmarried for the entire year. This is true even if the decree is not received until December 31st.
If a decree is not received before this deadline, the filer is considered married for that tax year. A married individual can file either jointly or separately.
People often receive a lower overall tax rate if they file jointly. However, it is important to note that if you chose to file jointly you may be held accountable for your future ex's tax liability. As a result, some chose to file separately. This means that you should only be held responsible for your own tax liability.
If children are present, there are two things to be aware of: child support payments are not deductible and only one parent should claim the children as exemptions.
Generally, the dependent exemption is granted to the custodial parent. However, the parent making child support payments may be able to claim the child as a dependent. Exceptions can be made in many circumstances, but the main situations are when the parent making these payments provides more than half of the child's support or the parents agree for other reasons not to follow the general rule. If the parents agree, the non-custodial parent can take this exemption.
In addition to child support payments, a divorce may also result in alimony or spousal support payments. Unlike child support payments, alimony payments are tax deductible.
It is important to note that the IRS keeps a watchful eye on alimony payments. If these payments end near the time child support payments are scheduled to end, an investigation by the IRS may be triggered. The IRS may also deny alimony deductions if they are provided in a large sum immediately following the divorce. The IRS may interpret this as an attempt to avoid the tax implications of splitting property.
Navigating through a divorce is difficult, and balancing the emotional and financial implications can seem overwhelming. If you are going through a divorce, contact an experienced divorce lawyer to discuss your situation and better ensure your legal rights are protected.
Article provided by Lawrence & Jurkiewicz, LLC
Visit us at http://www.ljct-lawyers.com---
Press release service and press release distribution provided by http://www.24-7pressrelease.com
# # #Read more Press Releases from FL Web Advantage: