Divorce and Taxes
Divorce and taxes aren’t quite as bad as “death and taxes,” though it certainly may feel that way as you navigate the divorce process. If you are going through a divorce, you need to think about the tax implications that you may soon be facing. While some individuals may try to sift through the tax code solo, at Buckhead Family Law, we know that the more complex financial divorces require the professional help and guidance from experienced lawyers and accountants.
Going through a high asset divorce? You’re not alone. Valuable resources and expert legal help are available to guide you through this process. One size does not fit all, so make sure you get specific advice based on your personal circumstances.
In the meantime, here are a few pertinent topics that you may want to consider before preparing to file your taxes.
You May Have to Change Your Name
If you changed your name as part of your divorce, then you will need to notify the Social Security Administration of said name change. You can either go to the website to change your name and file for a new card using File Form SS-5, or you can call 800-772-1213 to get a new one.
Filing Early May Be Your Best Bet
If your complex financial divorce includes children and child support, there are some tax implications that you will also need to consider. Child support will not be tax-deductible for either party. If you are the person entitled to claim your child on the upcoming tax returns, as appointed in your divorce decree, and/or pursuant to the IRS Rules, but you think there is a chance your ex will attempt to do so, it may be in your best interest to file early to avoid any problems. This doesn’t mean that you should rush your taxes (because they may be complicated), but make sure you look to your divorce decree and discuss these exemptions and credits with your attorney or accountant to make sure get the tax benefits you deserve.
In some cases, you may want to wait to finalize your divorce until after a particular part of the year to reap certain tax benefits. Keep in mind that your marital status on December 31st is your status for the whole year. For example, if your spouse earns more money than you do and you wait until after December 31st, one person may have a significantly higher tax bill. For many families, filing jointly is more forgiving than filing single.
However, if both partners are sizable earners, it could prove more advantageous to finalize everything as soon as possible.
The IRS Can Provide You with Additional Guidance
If you are confused about filing, you should begin to educate yourself with guidance from your accountant or even the IRS. There are some documents on the IRS website that can help you gain important insight into your particular situation, such as:
- Determining What Your Tax Status Is
- Knowing What Benefits You Can Claim
- Figuring Out Dependency Exemptions
While these shouldn’t be your only resources for filing your taxes, they are a great place to start when you want to familiarize yourself with the tax implications of divorce.
Don’t Delay – Retain Legal Counsel As Soon As Possible
Trying to adequately juggle a high asset divorce with pending tax obligations can be quite difficult, but it doesn’t have to morph into a nightmare. Instead, you can be proactive and help yourself and your family. Every complex financial divorce is unique and you should always consult with your attorney or accountant for specific tax guidance and advice, but at Buckhead Family Law, our experienced legal team can help you build a strong marital asset division case that works best for you, your family, and your tax situation. We are here to assist you and help this be a positive turning point for your family. Schedule a consultation today by calling at 404-600-1403.