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Divorce is often a time of confusion and financial strain. Despite these troubles, the issue of divorce and taxes is a very important thing to consider when you are going through a divorce. Despite uncertainty and changes in your tax status, the Internal Revenue Service (IRS) will still expect you to pay taxes in a timely and appropriate manner. If you are concerned about your divorce and taxes, it may be beneficial to speak with a qualified attorney and even a tax advisor, both of which can ensure that your legal rights and options are protected.
One of the key features of most marriages is the pooling of economic resources from both parties into a single supply. When a couple is married the IRS allows them to file as, “married- filing jointly” or “married- filing separately.” When it comes to divorce and taxes, each person's tax filing status must be altered to reflect their current marital status and number of dependants. It is crucial for divorcing parties to be aware of the changes resulting from divorce and taxes requirements.
Taxes play a large role in the distribution of property during a divorce. Child support, investments, alimony, pensions, and property decisions can all be affected by divorce and taxes. The IRS is ultimately who determines how alimony, child support and property distribution are reported for tax purposes. The IRS does publish a document regarding divorce and taxes which can provide you with important information to consider during a divorce. This divorce and taxes information is detailed in IRS publication 504: Divorced or Separated Individuals . It may be helpful to review this document with the help of an attorney who can ensure that your interests are accounted for and protected.
When it comes to alimony, or spousal support, payments divorce and taxes rules are typically as follows: the person who receives alimony must include it as part of their taxable income, while the alimony provider is not taxed on these payments. The divorce and taxes regulations for child support are much different. Whoever is paying child support will most often have to include these payments as taxable income, while the parent receiving child support is not taxed on it. In addition to this, the custodial parent will also be able to claim the children as dependants to receive a tax deduction. According to the IRS, federal law determines who is the custodial parent.
The divorce and taxes regulations regarding assets and debts can be a little more case-specific. In general, a property transfer (such as a home) between divorced individuals within two years of divorce is a non-taxable event. Pensions and other investments may be taxable, however. If party A is awarded part of party B's pension upon divorce, A may be subject to taxes and penalties on these assets. However, if party A is under the age of retirement, they can avoid taxes and penalties by directly depositing this money into an approved account.If you would like to learn more about divorce and taxes, please contact us to speak with a qualified and experienced family law attorney who can protect and maximize your interests.
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Child custody rights may be shared by both parents or, primary child custody rights may be awarded to one parent or legal guardian. Since the 1970s the family court will award child custody rights contingent with the best interests of the child.
Child custody for fathers following a divorce is one of the most important aspects of a dissolving marriage. Throughout history the legal presumptions about child custody for fathers has changed significantly. Before the twentieth century children were regarded as the property of their father. Under common law, child custody for fathers was commonly awarded, as children were considered a father's rightful property. A major shift occurred after this period in history, as family courts came to favor mothers in child custody cases. It was presumed that under normal circumstances, children did better when placed in the sole custody of their mothers.