Couples often assume that a finalized divorce is the end of their separation journey, but nothing could be further from the truth. Steps must still be taken to complete the unraveling of finances, and there are still some areas in one’s life that can be impacted by a divorce. For example, a divorce can affect a person’s federal income taxes. Learn more about taxes and divorce for disadvantaged spouses, and how some of the decisions you make now may impact you when you file your taxes next time.
Filing Married or Separate
Of all the tax issues that one must consider after a divorce, the decision to file a joint return or separately is likely to be the least complex. If your divorce is finalized before December 31, you can file your taxes using the single filing status. On the other hand, if your divorce has not yet been completed before January 1, your filing status must be married. You can choose to file married but separate. Just remember that you may lose out on some tax credits for doing so. If you are still not sure what to do, contact an accountant or financial advisor. They can help you weigh the pros and cons of each filing option.
Alimony Payments and Taxes
Although child support is not typically configured into your taxes, alimony may be. It is important that you consider this during your divorce so that you are fully prepared for the potential implications. If you have questions, speak to an attorney and a financial advisor about your situation. Both can give you a better understanding of what might happen during your next tax year, and an attorney can help determine if there may be other options available to you.
Asset Gains and Taxes
Asset gains – or the money that you make off an asset that you received during your divorce and then sold – are considered taxable items. Essentially, this means you must report sold assets on your tax return. On the other hand, if you keep the asset, you may not be taxed because divorce is not typically considered a taxable event. For more insight on taxes and assets received in divorce, contact an experienced divorce lawyer.
Contact Our DuPage County Divorce Attorney
At Abear Law Offices, we strive to protect your best interests – not just for today, but also in the future. Dedicated and experienced, our DuPage County divorce attorney can examine your situation and explain your options. If needed, we can aggressively represent you in the courtroom or during mediation. Schedule a personalized consultation with us to learn more. Call 630-904-3033 today.