Getting a divorce is never an easy experience and often entails an array of complex situations. Income tax is one of those situations that can cause turmoil around finances, property and child custody issues, so although you’ve made the decision to end the marriage, both the husband and wife are still legally responsible for all tax liabilities that have been incurred.
Marital Status on the Last Day of the Tax Year
Just when you thought you’ve turned a corner, and your marriage is finally over, here comes tax time. This is where it could get tricky and you could find your situation even more complicated. If you are getting ready to file for divorce, before you do anything you should know that divorce, annulment and even separation will very likely cause difficulties when it comes to filing your tax return. In fact, your marital status on the last day of the tax year determines your income tax filing status for that tax year. To grasp the full effect divorce can have on your taxes, you should consult both a divorce attorney and a tax advisor about your financial situation before you do anything. Without the help of both, you could find yourself in financial trouble.
The Impact of Taxes on Divorce
Divorce generally affects several tax issues and may impact on your tax return if property is transferred between spouses or when the property is used for a different purpose after the divorce. By way of example, suppose while you were married you had a vehicle that was used for business purposes. Then after the divorce it’s no longer used for your business. If that’s the case, it could have tax consequences that must be addressed on your taxes. In another scenario, if a spouse receives alimony or spousal support, it is considered income to the receiving spouse and can be deducted on income taxes by the spouse paying the alimony.
To read this article in its entirety, kindly click here.
For more information, contact the Family Law Offices of Renee M. Marcelle at (415) 456-4444, or online at http://www.familylawmarin.com/--