Before you file for a divorce in New York, New York, you need to consider how the divorce will impact your taxes and what you owe. You may also want to think about how your taxes will be affected when the divorce itself isn’t fully finalized.
How do back taxes work in a divorce?
There are many tax considerations and divorce issues that you need to think about even after you file. For example, even if you do not have any income, you are still required to pay back taxes. In most legal cases, those who have the most money will have to bear the most burden. If your ex-spouse earns more money, he or she will be required to pay more in back taxes. Here’s an example. Let’s say you earn $40,000, and your ex earns $80,000. You would not divide the back taxes evenly because doing so would put you in the position of having to pay double in taxes. Instead, your lower salary should dictate that you pay less, unless, of course, you have significant assets.
Taxable debt is helpful if you have a surplus of it after getting divorced. There is a percentage rate for each party to pay the taxable debt, so the burden does not fall solely on you. To get your own back taxes distributed, you must complete IRS Form 8857.
How are your taxes affected when the divorce is not yet finalized?
Until the divorce is complete, you are married under New York state law. Until you receive a definitive divorce order before the end of the tax year, you should simply file a joint tax return.
Getting a divorce is never an easy process. With that said, knowing what you owe in taxes can help the process be a little bit easier.