We are not tax attorneys and do not give definitive tax advice, but we can refer you to qualified tax professionals.
Divorcing couples should consider these effects on their taxes:
Filing status and exemptions Dependent exemptions Spousal support Retirement benefits
Filing status and exemptions
A divorced or divorcing couple’s filing status is determined as of the last day of a tax year, usually December 31.
For tax purposes, a couple is no longer married when a judge signs a final divorce decree or separate maintenance judgment.
If you have had custody of a child for more than six months and are not remarried by the end of the calendar year, you may qualify for Head-of-Household status.
Parents often split the exemptions when there are multiple children.
Parents of one child often alternate the exemption.
Child support is paid in after-tax dollars. There is no deduction for it.
Spousal support is treated as income to the receiving spouse, and a tax deduction for the paying spouse.
Spousal support can be an effective tool for reducing taxes.
Retirement plans/benefits can be divided in a divorce. For employer-provided plans, a Qualified Domestic Relations Order (QDRO) assigns a portion of the benefits of a qualified retirement plan to a spouse.
IRA plans usually do not require QRDOs to be divided.
When the receiving spouse withdraws the money, that spouse will be taxed on the amount withdrawn.
If your family’s assets are worth enough to raise concerns about estate taxes (currently $11.7 million for an individual or $23.4 million for a married couple), GRATs (Grantor Retained Annuity Trust) and SLATs (Spousal Lifetime Access Trust) are tw…
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