DIVORCE AND TAXES: What You Need to Know.
Whether considering divorce, have already divorced, or in the process of a divorce, knowledge of your tax filing options may save both parties a great deal of money.
While no one ever wants to discuss either divorce or taxes, April 15 will be here before you know it and, for those tax filers who are considering divorce, have already divorced, or in the process of a divorce, knowledge of your tax filing options may save both parties a great deal of money. The tax treatment of support payments, adjustment to tax withholdings from income, potential need for innocent spouse protection, tax dependency exemptions for children, and whether to file jointly, separately, or head of household, are all issues that should ideally be addressed before either party files their income tax returns.
These issues should ideally be addressed by and between the parties, with the potential assistance of their accountants and attorneys, in the parties’ marital settlement agreement, final judgment of divorce with stipulations, and/or an appropriate consent order. It is important for both parties to file consistent income tax returns so that neither party is required to file amended returns and/or otherwise pay sums inconsistent with the agreements reached by and between the parties and/or applicable law. While it is always better to cooperate and agree rather than acting inconsistently, it is particularly important in the context of filing income tax returns.
Please do not be afraid to ask your accountant about these legal issues and/or to schedule a consultation with one of our attorneys to address same.