When you find yourself moving forward with a divorce, it can feel like you have a tsunami landing on top of you! There are so many moving parts.
The good news is that if you and your spouse choose the collaborative process, you can work through your financial landscape in a non-adversarial, no-court method. You may also choose to have a neutral financial advisor who can help both of you develop a financial agreement that is agreeable to both of you.
Often, we see couples who are divorcing that have not considered how their taxes will be impacted. And when taxes have not been discussed, couples who have divorced are caught off guard.
Here are some ways your taxes will change:
- After living apart, clients may be able to use a head of household federal tax filing status
- Claiming your children as dependents will be determined by where they physically lived most of the time
- Child support can’t be claimed on your taxes
- For federal tax purposes, if alimony was not ordered prior to January 1, 2019, there is no avenue in which to deduct alimony
So, with these tips, do we have your head spinning? If not, we would be surprised because taxes are among the top five questions we are often asked. Taxes are confusing when you are married, let alone when you are getting separated/divorced.
This is what makes collaborative divorce an attractive process. There are neutral financial advisors who can help both clients with their financial landscape to ensure that every aspect of your tax and financial plan is considered.
A Better DivorceTM is an interdisciplinary group of professionals who are committed to non-court, non-confrontational solutions for family law matters.
Note: This information is general in nature and should not be construed as legal/financial/tax/or mental health advice. You should work with your attorney, financial, mental health or tax professional to determine what will work best for your situation.