Divorce and Taxes

Divorce can have wide-ranging effects on a variety of issues. One often-overlooked influence is the change in tax procedures for recently divorced adults. Here are some important things to keep in mind:

Property taxes. Property transferred between spouses does not usually carry income tax requirements with it. Transferring the property to a third party or into a trust, or even changing the primary use of the property, can incur some tax penalties.

Custody. The parent with custody of the children can claim a tax credit. It is important to note that only one parent can claim this tax credit.

Marital status. For tax purposes, marital status is determined on the last day of the filing year. If a couple is divorced in the fall, they will be considered, from the IRS’ perspective, to be single for that entire year. There may be advantages to filing a joint tax return, so finally dissolving the marriage early in the next calendar year may be financially responsible.

Support payments. Spousal support and child support are not in the same tax situation. Alimony (spousal support) is considered income for the receiver of the money, and is taxed as such. It is deductible for the person paying alimony. Child support, on the other hand, is not considered income, and is therefore not subject to those taxes.

Contact Us

If you are going through a divorce, contact the West Palm Beach divorce lawyers of Eric N. Klein & Associates, P.A. at 561-353-2800.