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New York High-Stakes Family Law Blog

Head of household filing status after divorce

If you and your spouse in New York are discussing the possibility of getting divorced, it is important for you to learn as much as you can about the financial implications of this decision. Some of the decisions made during a divorce may have immediate repercussions but others may not be evident until later on. One area of your life that will be impacted by your divorce is income taxes. If you are not in the middle of tax season, it might be easy to ignore this as you negotiate with your partner about who will get what from your marital estate. However, special attention to taxes is essential during your divorce.

As explained by SmartAsset, once your divorce is final and it comes time for you to file your first solo tax return, your tax filing status and therefore your tax bracket may be dictated in part by the terms of your divorce agreement. Unmarried taxpayers can file income tax returns under one of two statuses. The first is single and the second is head of household. The latter status offers you more advantageous deductions and a lower tax rate.

Moving away with your kids

Life will inevitably go on following your divorce in New York. Part of that may include you needing (or wanting) to relocate. That can cause complications if you have custody of your kids. Often, the issue of relocation will be addressed in your custody agreement. Yet if it is not (or you find yourself needing to relocate for family issues or business), what are you to do? Many come to members of our team here at Robert G. Smith, PLLC with this same question. Like them, you may be concerned that your decision to relocate could negatively affect your custody situation. 

You typically need to inform both your ex-spouse and the family court that has jurisdiction over your case of your intent to relocate well in advance of it actually happening. If your relocation will impact your ex-spouse's visitation rights, then the court will evaluate your case to determine whether you have a good reason to move. According to the New York City Bar, factors that it will consider include: 

  • The quality of relationship your kids share with both you and your ex-spouse
  • If the relocation would cause strain on the relationship with your ex-spouse or other siblings not living with you
  • How much your kids' lives may be improved financially, emotionally and scholastically by the move
  • If your kids and your ex-spouse will be able to maintain their relationship by simply modifying their visitation

Business valuation in a divorce

When a married couple in New York owns and operates a business together and decides to get a divorce, the question about what to do with the business logically arises. Some people might be able to find a way to work together as business partners even if they are no longer married. Forbes indicates that for people who do not feel they can do this, they might sell their business to a third party or allow one spouse to buy the other person out.

In these latter two situations, the value of the business must be determined and agreed upon. This is something that should happen as early in the process as possible, in large part because the financial worth of the company will be directly linked to other financial agreements in the divorce settlement.

Financial secrets during marriage can impact divorce outcomes

Mistrust among divorcing spouses can be common, even during amicable divorces. However, when a spouse has a history of financial infidelity, mistrust can play an even bigger role in a divorce.

Financial infidelity is becoming more common in America, and could be contributing to numerous divorces each year. Financial infidelity involves secretive acts regarding significant amounts of money or debt. It can include secretly spending money, owning secret credit cards, having secret bank accounts, hiding secret stashes of money or accumulating secret debts, but it does not typically include small secrets, such as a secret birthday gift.

Temporary versus permanent spousal maintenance

Spousal maintenance in New York is a complicated topic, and we at the law office of Roger G. Smith know that it may cause you a great deal of confusion. It is difficult to understand under the best circumstances, and further complicating matters, the terms and rules keep changing.

For example, you may not immediately recognize the terms "spousal maintenance" or "spousal support" because in the past it was known as "alimony." More recently, a federal law went into effect that changed the rules regarding taxation of spousal support. Therefore, it is completely understandable that you may not readily grasp the difference between temporary and permanent spousal maintenance.

When do courts mandate supervised visitation?

Going through a divorce in New York is hard enough but becomes especially complicated when you have young children involved. Child custody issues are an essential part of a divorce agreement between you and your divorcing spouse. Sometimes, there are certain circumstances that warrant court-mandated supervised visitation for a parent. 

According to Psychology Today, approximately 40% of marriages in the United States end in divorce. Many of these marriages involve children, and today most couples seek joint custody of their child or children. However, sometimes there are reasons why this should not occur and a judge will order you or your spouse to be subject to supervised visitation while spending time with your minor.

Divorcing in 2019? Know these new tax laws

As one of many married people across New York who believes divorce is in your near future, you may be trying to get your affairs in order so that you can navigate the separation and make the split as seamless as possible. While divorcing your spouse alters many aspects of your life, recent tax changes have also impacted how divorced parties file taxes, and the more you understand about these changes, the less likely you will be to get an unpleasant surprise when you file. Attorney Robert G. Smith, PLLC, recognizes that those who divorce in 2019 or later will face numerous tax implications, and he has helped many people navigate this and other issues relating to divorce.

According to Forbes, new tax laws have impacted the way you or your former partner will handle alimony payments, if applicable, when you file this year’s taxes or others moving forward. Until this year, people who divorced and then paid alimony to their former spouses could deduct the amount paid from their taxable income. The person on the receiving end of the alimony payments, meanwhile, would include the money received when reporting his or her taxable income.

Some couples using trusts to get around alimony tax changes

At the beginning of this year, major changes to the federal tax code took effect, including one that greatly impacts the tax implications for alimony. Prior to 2019, the law allowed alimony payers to take a tax deduction on their payments while alimony receivers were required to claim the payments as taxable income. Now, neither side is allowed to deduct or required to claim.

According to a recent New York Times article, the reason for this change was an imbalance that has long existed. Since the provisions were first enacted in 1942, alimony payers have been very likely to claim the deduction while alimony receivers have been much less likely to report the income. Getting rid of both requirements means less of a revenue shortfall for the IRS.

How we would deal with threats to your assets during divorce

There are many ways that you could lose your assets or see them diminish in value during a divorce. At the law office of Robert G. Smith, PLLC, we use a variety of strategies to address these diverse risks. 

Of course, it is difficult to defend against asset loss if you do not know where and when it could occur. Here is a brief overview of some of the major risks associated with most high-asset divorces in New York.

Frequent communication can help your teen handle your divorce

Your teenager can get pretty moody on any given day. If you and your ex are going through a divorce, it can make things even worse. What can you do to make things easier for them?

A recent study published in the Journal of Family Issues shows that consistent parent-child contact is key to helping young people get through their parents’ divorce. To ensure your teen’s well-being, you should focus on maintaining communication with them.

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