With the tax season upon us, I thought a little tax information would be helpful. It is important to know that the rules of the tax game are different for the divorcing and divorced. Nerdwallet’s article 7 Tips for Preparing your Taxes in a Divorce and Kiplinger’s article Most Overlooked Tax Breaks for the Newly Divorced provide some good overall information to consider. In summary, the articles address critical issues like:
Filing Status: The decision to file singly or jointly can have tremendous tax implications
Statements: Gather your account statements (you should be doing as part of your divorce already)
Getting Help: If you need it, hire an accountant or a tax specialist
Support: Understand how child support and alimony will impact your tax situation (for example, in Arizona, alimony is not taxed to the recipient nor deductible to the payor)
House Planning: Tax implications can impact your timeline for selling and/or divorcing
Child Effects: Head of Household, Child Tax Credit, medical expenses, and others will impact taxes.
Property Division: Remember, these decisions will come with tax liability you need to anticipate
Overall, these items are valuable to consider and discuss with your attorney, and you’ve probably discussed several of them already. In fact, in complex cases we will often have an expert involved to help throughout the divorce process, which is something you should consider discussing with your attorney. However, most family law attorneys will tell you they do not provide tax advice. I always tell my clients to consult with an accountant or a tax expert to help them with filing and tax planning.
Jason Castle is a family lawyer who specializes in high-conflict cases. He's also a former prosecutor & social worker. Hear his latest divorce thoughts!