Divorce and taxes as a conversation sounds like the combination of two complicated and stressful things. Just like we all have to take care of our taxes every year, divorce can be as common. To further intensify both of those matters, when divorce occurs, tax norms, needs and risks can change.
And now spring is officially in the air. Beyond the sprouting buds and even warmer sunshine in California, it also means you are dealing with the annual stress of having to file your tax returns. While taxes can be complicated for almost anyone, taxes after divorce can get more complex.
What are some of the important tax changes that divorce parties should understand? If you have been divorced as of Dec. 31 of the tax year for which you are following, these are some points to consider:
Should you file jointly or separately? Talk to a tax professional and even your divorce lawyer about this. You might want to strategize the timing of your divorce for tax benefits or ease.
How does the custody of the kids impact the tax filing? If you have kids and have filed taxes as a parent for years, it is likely no surprise that you may get a tax exemption through claiming the kids as dependents. After divorce, it is generally the legal norm that the parent with physical custody of the kids can claim them as dependents.
These are just a couple of simplified basics in terms of divorce and taxes. This list goes on and will continue in a future post on our California divorce blog. Anyone whose taxes are a big concern within their divorce process should not hesitate to discuss that with their lawyer and get advice on how to strategically avoid the legal process to best benefit their future as a family, as well as financially.