Tax Considerations During a Divorce
If it feels like your divorce has touched every corner of your life, then you likely are experiencing the reality of the situation. Divorce affects every significant part of a person’s life, including taxes. Any divorce case will impact the decisions that are made about filing taxes, as well as how the changing tax status will impact each party’s financial future. The best way to ensure that you appropriately are addressing all of the tax matters associated with your divorce is to work with an experienced New Jersey Divorce Attorney. When these matters are not handled properly, they can have negative repercussions for many years to come.
Some of the ways in which divorce affects taxes are fairly basic, such as filing status and withholding amounts. The date upon which your divorce becomes final will determine whether you can file one more joint tax return with your soon-to-be former spouse because your legal marital status on December 31 of any given year determines your filing status for that entire year. Once you are divorced, be sure to check your W-4 and adjust your withholding, if necessary, so that you are not faced with an unexpected tax bill when you file a single return on the next tax day.
There are special issues to which a person should pay close attention. When it comes to claiming children as dependents on the tax return, a divorcing couple can set out an agreement for how they would like to handle that as part of their divorce settlement. If the parties cannot agree, the court will include that matter in the divorce order that it issues for them. Frequently, it is easier to negotiate a more favorable resolution between the parties rather than rely on court intervention.
Divorce settlements often include the transfer of various assets to each of the parties. When any asset is transferred, the issue of taxation must be addressed, either at the time of transfer or when the receiving party sells the asset in the future. Taxes on different types of assets, such as real estate, retirement plans, and vehicles, are handled differently, so be sure to consult with your accountant regarding the tax consequences of any proposed transfer of assets, as well as how to transfer the assets correctly to minimize any tax liabilities. We routinely work closely with accountants and tax professionals to ensure the best outcome for your divorce.
The Bronzino Law Firm: Comprehensive Support for Your New Jersey Divorce
Your New Jersey divorce is a matter of the utmost importance. Since your divorce affects so many areas of your life, you deserve to work with an experienced New Jersey Divorce Attorney who can help you with all of your legal needs. The Bronzino Law Firm, located in Brick, New Jersey, serves clients in Ocean County, Monmouth County, and the surrounding areas. To learn more about how we can help you obtain the results that you want in your New Jersey divorce, please contact our office for a free initial consultation. You may call us at (732) 812-3102. We look forward to hearing from you.