The end of a marriage raises a number of troublesome tax issues. Before you try to bridge this tough transition on your own, talk to a trusted tax advisor who can guide you in the right direction about key financial considerations.
Whether you’ve recently become separated or divorced from your spouse, it’s critical to understand the implications of your new tax status. Depending on how your specific situation unfolds, your tax filing could be seriously affected by how you choose to handle alimony payments, child dependency agreements, injured spouse relief claims, and other unfamiliar matters.
The rules governing how alimony is taxed are one area where people tend to trip up. It’s important to know the effective regulations to determine what actually qualifies as alimony, how to deduct alimony you’ve paid, or how to report alimony you’ve received. For instance, child support is not alimony, and payments are only considered eligible if the taxpayers no longer live together.
Another thorny area involves the dependency exception for children. While the general rule states that the custodial parent may claim the child as a dependent, real life is not always that cut and dried. Several exceptions exist that may allow the non-custodial parent to qualify for a dependency exemption. What matters most is to fully understand your parental position and never sign anything until you do.
Marriages fail for all sorts of reasons. But you can’t afford to let emotions allow your tax circumstances to take a turn for the worse. To ensure a strong financial foothold after a divorce or separation, look to Taxation Solutions, Inc. for the compassionate and expert counsel you need. Serving Atlanta and beyond, we’re here to help with tax planning in the aftermath of divorce. Let us be your voice of reason during this uncertain and difficult tax time.