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Common Tax Question Before and After Divorce

Taxes can be a pain to deal with every year, although they have to be done. On top of pains that comes with taxes, inserting a divorce into the equation can be that much more stressful. However, it doesn’t have to be if you are aware of common questions and issues that come with tax preparation. Luckily, provided below are very common tax questions and answers to those questions. You don’t have to worry about embarking into tax preparation on your own, a nice family law attorney and accountant can be there to assist you and help you find the best suiting financial path.

  • Starting off, some people don’t know that spousal support received is considered taxable income, but it is. The paying spouse can deduct those payments on their own tax returns, so that is something to be aware of. Child support, on the other hand, it not tax deductible or tax includable. Since it comes out of post-tax dollars, it has already been covered for.
  • Existing California and federal law allows the parent with whom the child stayed the greater number of nights is entitled to claim dependency exemption. The other parent, the “noncustodial” parent, usually cannot. However, if you agreed with your ex during the divorce to allow the noncustodial parent to claim the child, the IRS will honor it. It’s common that parents will agree to alternate claiming the child to split tax exemption. If you divorced recently, your spouse needs to fill out IRS form 8332. If you divorced prior to 2008, you just need to attach the divorce court order to your tax retur.
  • Since disagreements, hostility, and heated disputes are very common when going through a divorce, it is suggested that you keep detailed records of support payments received, paid etc. to avoid any of those disagreements.
  • Even if your divorce is not considered “final” by the end of the year, you are still allowed to file an individual tax return. It is suggested that you consult with your personal accountant or tax preparer for the best options, but it is likely that they will have you file married but separate or file jointly spouse.
  • When you begin preparing your tax return for the year, it’s suggested that you ask for advice on deducting attorney and/or accountant fees for state and federal income tax purposes if you decide to you down that route.
  • Whenever you start preparing your income tax returns, you should always visit the IRS web site to access the specific manual entitled Tax Information for Divorced and Separated Individuals. This can help additionally with any specific questions or concerns that may arise when filing your taxes for the year.
  • Thankfully, for any spouses whose exes had an inaccurate joint tax return, there are now laws entitled “innocent spouse” that were put into place to protect these victims. If this described situation applies to you, you can find out how you may benefit by visiting the Innocent Spouse and the IRS.

Hopefully, with the tips provided above, this specific information can help you during your divorce and help you better understand the process of tax preparation. Also, your Family Law attorney and accountant can be just as helpful during this process. Don’t be hesitant to ask them questions and for help along the way. Contact your divorce attorney because your financial future depends on it!

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