Understanding The Role Taxes Play In A Divorce
Taxes are always a certainty before, after and during your divorce. At The Law Offices of Paul C. Bishop, PLLC, we help clients understand how divorce will affect their taxes. We will work to maximize your cost savings by creating a comprehensive tax plan and divorce settlement.
Our knowledgeable and experienced divorce attorney can guide you through your tax options throughout your divorce. For a confidential initial consultation, contact our tax and divorce attorney in Quincy.
Understanding The Tax Consequences Of Your Divorce
We can help you understand the tax implications of every aspect of your divorce or family-related matter, including:
- Alimony: Spousal support is tax-deductible to the spouse who pays it. In order to claim a deduction, however, the spousal support must be included in the court order. Voluntary payments are not tax-deductible. Also, alimony is taxable income for the receiving parent.
- Child support: Unlike alimony, child support is not tax deductible and it is not taxable income. However, the amount of support still needs to be included on your tax return.
- Marital home: If you receive the marital home in your divorce, it is important to include language in your settlement to divide any capital gains tax between you and your ex-spouse. Without this language, you could end up paying the full taxes for any increased value in your home during your marriage, and this tax can be costly down the road.
The Difference Between Joint And Separate Filing
After your divorce is final, you cannot file jointly with your ex-spouse. However, while you can file jointly during your divorce, it may be beneficial to you to file separately. In particular, if you or your spouse doesn’t work, you may be able to save money by filing separately.
Our divorce attorneys will advise you on all of your predivorce and post-divorce tax options. We will help you develop a divorce settlement that takes taxes into account.