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Are the Fees of a Divorce Tax Deductible?

Thursday, October 26, 2017

If there is one thing a divorce can cause upheaval in aside from your family life, it is with your taxes. After a split, your tax status can change dramatically. You may have to claim significantly less, but you can also deduct significantly less. While alimony has to be reported on taxes, what about the other financial matters associated with a divorce, like the legal fees?

One of the most beneficial things you can do when tax season rolls around the first year after your divorce is to consult a tax professional. The IRS can make even simple mistakes into very costly ones, which is why you want a professional to help you. However, while it can depend on your unique circumstances, when it comes to the tax-deductible nature of any divorce fees, most professionals will say it is not possible to deduct them. In general, the IRS considers a divorce and thus any fees from that as a personal expense, so it has to come out of pocket. Even if you somehow had to end up paying for the legal fees of your spouse, you still cannot deduct them.

In terms of spousal support, typically these payments are not deductible either, but there are some very special exceptions that may make a portion or all of it tax deductible. Unfortunately, tax law is so complicated it merits having a professional look over your fees. We are not tax lawyers, but if you need representation to make sure your divorce is fair and successful as well as doesn’t rack up tons of (non-tax-deductible fees), contact us today.

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3 Tips for Navigating Taxes When Filing for a Divorce

Thursday, August 17, 2017

Filing for a divorce is always a hassle. Dealing with taxes while in middle of the divorce process just makes things more confusing. Here are a few tips to help you out.

Know Your Filing Status

Your filing status depends on your marital status on December 31st of the year you’re filing for. If you were already divorced then, you should file as a single. If you were married, you’ll file as married. If filing as married, you can file either jointly or separately.

Communication Is Key

You may not want to ever talk to your spouse again, but it’s important that you communicate about filing taxes. You don’t want one of you filing jointly and the other filing separately. You also don’t want both of you filing separately and each claiming your children as dependents. This is a sure way to get the IRS knocking on your door for an audit. Also, remember that joint returns have joint liability for any funny stuff.

Child Support and Alimony

If you’re paying child support, that is not tax deductible. If you’re paying alimony, however, that is deductible. If you are receiving alimony, then that is reportable income. Keep in mind that if you are paying interim support without a court order specifying that you pay alimony, then you can not report it as alimony. There are some other instances where alimony may not be deductible, so learn about the rules.

Need help with filing for a divorce? Contact us for legal help today!

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