What You Need to Know about Divorce and Taxes
By Saunders Law Group on June 20, 2017
Divorce and taxes are among the most dreaded words in the English language. Put the two together and you have a nightmare on your hands. Fortunately, an experienced divorce attorney can help you navigate this complicated process. The skilled team of divorce attorneys at Saunders Law Group in Winter Haven, FL, and Polk County, FL understand that taxes are probably one of the last things on your mind at this time. We also understand that with divorce comes raw emotion. That is why we believe in reaching settlements rather than dragging out a painful experience in court.
With regards to your taxes, the first thing you need to figure out is your filing status. Everything depends on whether or not you are legally divorced when the clock strikes midnight on December 31.
- Legally divorced: If you are legally divorced once the New Year begins, you will file your taxes separately. You may file as single or head of household. Those filing as head of household have a lower effective tax rate and higher standard deductions than those filing as single. However, to qualify, you must meet a few standards: you must be unmarried, have a dependent living in your home for at least half of the year, and pay above 50 percent of home maintenance costs.
- Not legally divorced: If you are not legally divorced by January 1, you can file your taxes either jointly or separately. Those who file jointly will pay less in taxes than those who file separately.
Alimony and Child Support
The purpose of alimony is to ensure that a spouse with lower earning potential and less access to resources retains the standard of living they had when married. The purpose of child support is similar in that it shields a child from the economic impact of a divorce. However, a spouse paying alimony can deduct those payments from their gross income whereas a parent paying child support cannot.
For tax benefits, spouses who have not legally divorced by midnight on December 31 often elect to file jointly. The tricky part is, you will need to agree on how the refund will be divided. If you file as head of household, you stand to receive a larger federal refund than you would if you filed single.
Benefits of Legal Representation
Divorce and taxes can cause great complications. For example, suppose December 31 comes and goes and you and your spouse have not legally divorced. Should you decide to file jointly, you will need to agree on how to divide your refund. If animosity exists between the two parties, coming to an agreement may seem impossible. A divorce lawyer can intervene and act as a mediator to ensure that both parties are satisfied with the outcome.
At Saunders Law Group, we believe that no one should go through a divorce alone. We offer compassionate, expert service that leaves all parties walking away with the best possible outcome. If you are going through a divorce, schedule a free consultation by visiting us online or by calling (863) 533-6200 today.
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