What Taxes Should I Be Aware of After a New Jersey Divorce?
Both the process of divorce and taxes are two complicated entities that can be overwhelming on their own. When going through a divorce, there are certain tax implications that spouses should be aware of. No one wants to discover taxes they were not expecting to pay after their divorce proceedings are over. It is because of this that it is important to stay educated and be prepared for what is expected of you once the divorce is official. To do so, retain the services of an experienced New Jersey divorce attorney for guidance.
How are Marital Issues Impacted?
During a divorce, spouses settle various marital issues. This can include child support and alimony payments. When deciding upon these issues, spouses may not think about tax impacts later on. In dealing with child support matters, it is important to know that these payments are tax-free and not deductible by the payer. On the other hand, alimony payments are deductible in most cases. A tax deduction is important to consider when determining an amount that is paid. In addition to this, former spouses are required to pay income tax on the alimony they receive.
Is My Tax Filing Status Affected?
During divorce proceedings, spouses often wonder if their tax filing status will be affected. It is important to know that there are some cases in which it can be. Individuals are considered unmarried if their divorce is final by December 31st of the tax year. When a person is considered unmarried, they will not be able to file joint income tax returns for that year with their former spouse. Unmarried individuals file their status as either single or head of household in some cases.
If the divorce is not filed by the designated date, individuals can still file joint tax returns with their former spouse. Alternatively, they can file separate returns as “married filing a separate return.”
What is Innocent Spouse Relief?
Innocent spouse relief is in regard to how individuals can obtain relief from the Internal Revenue Services (IRS) that they owe as a result of a joint income tax return filed during their marriage. A person’s eligibility for this relief can depend on various factors, including:
- Spouses filed a joint tax return that has a deficiency that is attributed solely to their spouse’s income that was received but omitted from the joint return
- Spouses establish they did not know and had no reason to know there was a deficiency when they signed the joint return
- Under the circumstances present, it would be unfair to hold the individual liable for the deficiency
Contact our Firm
If you need an experienced legal team to guide you through a divorce matter, contact Townsend, Tomaio & Newmark L.L.C today.