Divorce is a completely overwhelming state of being. You’re in danger of making emotionally fueled decisions rather than logic-based ones, especially when it comes to finances. The money aspect of divorce can make you want to crawl under a rock and stay there until it’s all over and you’re free. But that’s no way to start your new single life, particularly when it comes to the tax implications of divorce.
When you’re in the thick of a divorce, you may make hasty, unwise choices, financial or otherwise. You may allow your soon-to-be ex handle everything and just give you the paperwork to sign, trusting that you really are at an amicable place and he or she would never do anything to make your life miserable. You may go to a mediator with an uncontested divorce and allow them to pull the details together without asking them any questions – and if you don’t ask questions, you won’t get answers.
Choosing to stay in the dark can place you in a completely unexpected and horrifying situation, such as: You’ve divorced at the end of the year. For the whole of that year you took exemptions from your own paycheck based on the exemptions your former spouse was taking because you planned to file jointly. Now it’s a new year, you managed to squeeze through a quickie divorce, and you’re no long filing jointly. Suddenly, you discover that you didn’t take enough exemptions. And you’re hit with a big, hefty tax bill. No one wants this kind of reality to happen to them.
Tax Questions to Discuss with Your Divorce Attorney
When you’re thinking about things like child custody, who’s getting the house, and where you’re going to live now, tax implications may be the furthest thing from your mind. If it’s nowhere near April 15, you may not even consider what Uncle Sam has in store for you until it’s too late. But here are just some of the things you need to keep in mind and how your taxes can change after you divorce:
- Am I taking enough exemptions as a single person to avoid a major bill come tax time?
- Who gets to take the tax benefits and exemptions pertaining to the kids?
- Do child support payments impact my taxes?
- Can I and my ex both claim our children as dependents on our individual tax returns?
- How will the tax liabilities or benefits of our once joint property be split?
- Is alimony tax deductible? Or, for that matter, is alimony considered taxable income for the recipient?
- Can I claim head of household filing status?
Don’t agree to just anything in your divorce, and don’t attempt to do it yourself. A DIY divorce is almost always doomed to fail, and it will cost you more – financially, emotionally, and mentally – in the long run than seeing an experienced divorce attorney ever would. Tax implications are part and parcel of any divorce settlement – this issue will be discussed in depth if you consult with a qualified Michigan divorce lawyer. Contact Femminineo Attorneys in Mt. Clemens, MI, to schedule your free initial interview today.