Getting divorced is seldom easy. Often, it is the culmination of a time during which you and your spouse have tried to reconcile. If you can’t do that, you must separate, and the legal dissolution of your marriage can sometimes feel like a failure.
There are all kinds of ways a divorce can impact you. A divorce and separation lawyer should be able to help you, though that’s only the first of many factors you’ll need to consider. You’ll also need to think about tax implications that go along with divorce when tax time rolls around.
Let’s talk about those for a few moments right now.
You Will No Longer File Jointly
It’s true that some married couples file their taxes separately. However, most file jointly. If you get divorced, you will go back to filing singly again, perhaps for the first time in many years.
If that happens, you can probably count on the tax-filing process being simpler. Some married couples are able to file jointly without it being particularly complicated, but generally, filing as a single person is more straightforward than doing so with another individual.
Capital Gains and Losses
Many people think that are going to be serious tax consequences the year they get divorced because of the property transfers that occur. For instance, you might conclude during the divorce proceedings that one of you is going to keep the house while the other one will get more of your combined savings as a suitable recompense.
In fact, most property transfers that happen during a divorce don’t count as capital gains or losses. Because of that, the disbursal or acceptance of property that occurs during a divorce will not have the immediate or pressing tax implications that you might expect.
Child Support and Alimony
Child support and alimony payments will certainly be on your mind if you get divorced. Child support payments that you make are not tax-deductible, and you will also not have to pay taxes on any of these payments that you receive.
As for alimony, you can sometimes deduct that. It depends on whether the payments that you make meet certain specific qualifications.
If you make voluntary payments to your ex that were not mandated in the divorce proceedings, those are not deductible. You might elect to make some payments that were not specifically ordered during the divorce proceedings if you and your former spouse parted under reasonably good terms.
The most crucial thing to remember when you’re dealing with your tax situation following a divorce is that there are several IRS-dictated rules, regulations, and minutiae that will likely come into play. Unless you’re an expert in tax law, it is easy to become confused and bogged down in those details.
It’s almost always going to be to your benefit to hire a tax lawyer or consult with another expert who can help you as you file your taxes after getting divorced. You do not want to make a serious error during this process.