Divorce isn't just trying on former spouses' emotions but can be financially taxing as well. Your tax filing status changes after your divorce. There are also other tax implications associated with splitting up that you need to be aware of before you negotiate a settlement in your case.
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 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.
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.