Greenwood Divorce Taxation
Divorce will leave a trail of changes in your lifestyle, for better or worse. It will have legal consequences apart from the obvious emotional and mental strain on your family. One of these consequences involves your taxes, which our Greenwood divorce taxation experts can manage with you!
At Bartholomew & Wasznicky LLP, we have skilled and passionate lawyers to help you in all aspects of your divorce. Our team can handle all the family law issues relevant to your divorce and the taxation concerns that come with it.
We understand how important it is to consider your post-divorce tax liability during negotiations. This can help ensure that the divorce settlement will also be fair regarding its tax implications. So while your taxes may be the last thing on your mind during divorce, it’s our job also to include them as a significant factor in the proceedings.
Our goal is to help you transition from a married life to a single one in the least stressful way possible. And this includes helping you manage your taxes for a better financial situation post-divorce!
Maximize your financial outcomes during divorce with the help of our skilled divorce taxation attorneys in Greenwood. We understand the complexities of tax laws and their impact on your divorce settlement. Contact Bartholomew & Wasznicky LLP today for a consultation and ensure you make informed decisions that protect your financial interests. Dial (916) 260-2637 now to schedule your appointment.
How Will Divorce Affect Your Taxes?
Your finances will be affected following a divorce, especially if kids are involved.
Obligors will be paying child support and alimony, which can decrease their overall net income. Obligees, on the other hand, will have to adapt to a new situation and learn to become financially independent again.
And even if your divorced marriage didn’t involve kids, property divisions and alimony are enough to change your financial situation significantly. This change will include the amount of your income and how you file your taxes.
The following are brief overviews of how divorce affects your taxes. To ensure that you can get the latest information and best legal assistance, call Bartholomew & Wasznicky LLP at (916) 260-2637. Our Greenwood divorce taxation specialists will gladly answer your queries and help resolve your legal concerns.
Your filing status will depend on your marital status by December 31 of the tax year. While the divorce proceeding is still ongoing, you can either file as married filing jointly or married filing separately.
Filing separately will prevent you and your spouse from being jointly liable for the taxes incurred based on the joint return. If you decide to do this, remember that California is a community-property jurisdiction. This means that you and your spouse must report half of the community income and all separate income.
However, filing separately tends to incur higher taxes than joint filing.
Claiming a child as a dependent can reduce your taxes. You can also claim the head of household filing status, which may qualify you for favorable tax rates. You can even get tax benefits, such as child tax credit and earned income credit.
However, only one parent can claim a certain child as a dependent. This right goes to the parent with whom the child spends more time during the year. This rule applies even if you and your ex-spouse have joint child custody.
The other option is having a settlement agreement stating that you and your ex-spouse can claim the child as a dependent on alternate years.
Child support is tax neutral, meaning it won’t affect your taxes whether you’re paying or receiving it.
Child support payments are not deductible from the payor’s taxable income. Receivers don’t need to include child support payments in the calculation for their gross income as well.
But there is one aspect where child support may affect your taxes. If you missed your legally ordered child support payments, your tax refunds may be intercepted to ensure that you fulfill your payments.
Most of the time, dividing and transferring assets won’t result in immediate taxation changes. However, capital gain taxes will later affect your and your ex-spouse’s taxes. This is the tax on the profit gained by selling real estate, mutual funds, stocks, artworks, and other non-inventory items.
This means that if you or your ex-spouse sold a property that you gained from the settlement, you may have to pay capital gain taxes if the property has increased value from the time of acquisition.
In a lot of cases, primary residences are exempted from this. Or you can exclude up to $ 250,000 of gain from the sale of a primary residence if you meet ownership and residency requirements.
Under federal law, alimony is not considered as income of the recipient, so they won’t be taxed for it. In line with this, alimony payments are also not deductible from the payor’s income.
However, California law allows the payors to deduct their alimony payments from their state tax returns. Receivers should also list their received alimony as income.
Passionate, Full-Service Greenwood Family Law Firm
Divorce and tax liabilities are two complex legal concerns. And while these two don’t usually worry people simultaneously, you should know that thinking about the tax implications of divorce is crucial.
This is the reason why our Greenwood, CA law firm offers our expert legal assistance to tackle these issues. If you’re planning to go through a divorce, we will help you make smart decisions by guiding you through all the legal consequences that an action can have. And these include your taxes on top of other terms outlined in your divorce settlement.
Our lawyers have in-depth knowledge of Greenwood divorce taxation laws. We can help negotiate for a divorce settlement that will make your post-divorce tax liabilities easier to manage.
More importantly, we can offer legal representation whenever you have family law issues. Whether you need help finalize your divorce, establish paternity, or get protection against domestic violence, Bartholomew & Wasznicky LLP has legal experts you can trust.
Talk To Our Legal Experts Today
At Bartholomew & Wasznicky LLP, all our lawyers are passionate about helping our clients resolve legal issues as efficiently as possible. When it comes to divorce, we aim to help you achieve a favorable settlement that will make your transition to a single life easier.
This includes making sure that you know the consequences and benefits of certain decisions on your post-divorce tax liabilities!
We also work closely with forensic accountants or tax accountants. This ensures that you can take legal actions that will benefit you and your family while securing a manageable future tax obligation.
Optimize your divorce settlement with the expertise of our Greenwood-based divorce taxation attorneys. We specialize in navigating complex tax laws to safeguard your financial interests. Contact Bartholomew & Wasznicky LLP now for a consultation and make informed decisions for a favorable outcome. Call (916) 260-2637 to schedule an appointment today.