It is officially tax season, with the April deadline closing in with alarming speed. Perhaps this will be the last time that a divorcing couple files jointly together. The division of your community assets will be an essential part of the final agreement, so it can be a significant misstep not to consider the tax implications of the split. It is crucial if you are a business owner or have an extensive financial portfolio.
An experienced, Board-Certified Family Law expert attorney can guide their client through various strategies to minimize unnecessary tax burdens. It can be a real benefit when it comes time to divide the assets.
6 important issues to consider during divorce
The following can impact your tax return or lead to unexpected penalties:
- Capital gains: This can happen if the couple sells long-term investments.
- Post-Divorce Spousal maintenance recapture: The IRS may require a spouse to report alimony or post-divorce spousal maintenance as income.
- Real estate: The sale of a family home, vacation place or other property can impact taxes.
- Change in status: The couple may no longer file jointly once the marriage ends.
- Dependent exemptions: Both cannot claim the same minors or dependents, so parents can apply a strategy to maximize those exemptions.
- QDROs: Review qualified domestic relations orders involving pensions and other benefits to maximize their tax benefits.
What if there are tax problems?
Your spouse may want to bend the rules or may have tried questionable strategies in the past, which can lead to future problems for both of you. It is vital to work with your divorce attorney to see if you qualify to seek innocent spouse relief, negotiate equitable relief, or separate tax liabilities if the other spouse commits tax fraud.
Resolving these matters takes skill
Couples with complex financial estates often need to carefully consider these matters as they plan their divorce. They will likely face certain expenses and penalties during the transition, so it is wise to address all foreseeable issues with an experienced, Board-Certified Texas Family Law expert attorney.