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Taxes and Divorce: What to Know

The first thing a good attorney will tell you regarding taxes and divorce is to consult with a Certified Public Accountant “CPA”. You may already have a CPA you can discuss your divorce with to find out how to maximize your financial situation during equitable distribution of the assets and debts. If you do not have a CPA, the attorney can give you names of reputable CPAs they have dealt with in the community.

Many clients may not realize that there are penalties and tax ramifications when you divide retirement accounts. The attorney will also discuss with you that if you have IRAs, pensions, and retirement accounts to be divided during equitable distribution that you will want to do that by Qualified Domestic Relation Order “QDRO”. That way you avoid the penalty and taxes.

The attorney will discuss with their client the tax ramifications of alimony. The spouse that pays alimony will get a deduction on his or her taxes. The spouse that receives alimony will have tax consequences for receiving alimony. These issues can be discussed in depth with the CPA.

The attorney will tell you that in your pleadings you can request the tax credits regarding your children. The custodial parent is the parent that is allowed to claim the children under the IRS Guidelines. However, in a settlement agreement, the custodial parent can agree to alternate certain tax credits. One spouse will claim the child or children in even years and the other spouse will claim the child or children id odd years. This can be done by the custodial parent signing IRS Form 8332. Below is a chart of Who May Claim Tax Deductions and Credits.

If you have questions regarding Taxes and Divorce: What to Know, you may contact Ann Marie Giordano Gilden, P. A. to set up an initial consultation at: 407-732-7620.

This information is provided only as educational materials, and does not constitute the providing of legal advice, and does not create an attorney client relationship.

1 Income Tax: The Dreaded “Four-Letter Word” in the World of Child Support, by Frank P. Remsen, Esquire Tavares, Florida Bar Martial & Family Law 16 Commentator Winter 2016, pages 16, 17, & 23.