When you get divorced, taxes are probably one of the last things on your mind. Between arguments over custody and child support, dividing up your marital property, and paying legal fees, taxes may seem like a secondary concern at best. However, if you’re not careful, the IRS can wind up adding salt to the proverbial wound come tax season.
The first, and most obvious, issue is that, once you’ve commenced divorce proceedings, you’ll no longer be filing your taxes as a married couple, and instead will be filing as a single individual. This could, depending on the disparity between your income and your spouse’s income, put you in a completely different tax bracket. It also means you’ll no longer be able to claim deductions for married households, and whether you get to continue claiming deductions for any children you might have will depend on how custody is allocated.
There are other potential concerns as well. For example, until recently, the cost of spousal maintenance (the modern name for alimony) could be partly deducted from your taxes, but that is no longer the case. Maintenance, however, is not considered taxable income. Child support, similarly, isn’t considered taxable income for its recipient, nor can it be deducted from the taxes of the person ordered to pay it. This means that child support and maintenance payments can make for a great source of tax-free income (if you’re the recipient), or a major financial burden without any tax reprieve (if you’re the one paying it).
If you’re going through a divorce, you’ll need legal representation to get the best outcome possible. The matrimonial attorneys at the Marnell Law Group have the knowledge and experience you need to fight for your rights and protect your assets. We provide matrimonial representation across Nassau and Suffolk Counties. Give us a call at (516) 542-9000 or send us a message through our contact page.