There’s no more exciting topic in the world than taxes, am I right? In all seriousness, nobody in the world likes to talk about taxes- that includes CPAs, tax preparers and even Jon Hamm in those H and R Block commercials that run at the beginning of each calendar year.
Whatever your opinion on taxes- too high! No, not high enough!- I don’t think anyone enjoys signing a check over to Uncle Sam or having to complete the mountain of paperwork to get them done. Even with the advent of online tax preparation websites, there is no real joy in doing your taxes.
However, they are necessary and will not be going anywhere as long as the IRS and our federal government have anything to say about it. The breakdown of how taxes are handled by families usually goes something like the following.
One spouse will act as the “nerd”- the analytical type who doesn’t quite enjoy doing the taxes but comes close to it. The other spouse is the “free spirit” who is a natural spender but not a natural saver and takes no joy whatsoever in doing the sort of arduous work it takes to complete your taxes.
This can work out ok for you and your spouse because you’re able to balance each other out- each one of you is good at something the other is not.
What happens, however:
- when you and your spouse decide to get a divorce?
- How are you and your spouse going to manage taxes for the year of the divorce?
- More importantly- if you’re the free spirit with no analytical bones in your body- how will you take on the responsibility of doing your taxes as a single adult?
Today’s blog post from the Law Office of Bryan Fagan, PLLC will discuss this topic. How to file and tips for handling your taxes during a divorce will be gone over in detail. Strap in and prepare for the most exciting blog post you’ve ever read…on the subject of taxes.
The importance of understanding your taxes
As we touched out in the outset of this blog post you may not have had any motivation at all to understanding taxes prior to your having filed for divorce. Now all of a sudden your taxes have become a very interesting subject with far-reaching implications for your life.
This is a smart and appropriate reaction. If you can have even a cursory understanding of how your taxes work then you will be able to prevent yourself from paying an unnecessarily high tax bill. Let’s start off by going over whether you and your spouse will need to file a joint tax return for the year of your divorce or if you all will be able to file separate returns.
Joint vs. Separate Tax Filings
Whatever your status is on December 31st of any given year will decide for you whether you and your spouse will need to file a joint tax return or not. If you are married on this date in the eyes of the law then a joint tax return will need to be filed.
It doesn’t matter if your case has gone through mediation, has settled and you’ve signed the divorce decree. Until you or your spouse go before the judge and the judge grants your divorce you all are still legally married. If you want to file a separate return from your spouse encourage your attorney to push your Final Decree across the judge’s desk in advance of Christmas.
Typically, though, filing a joint return is usually your best bet if you want to save money and keep it from going to fill the taxman's coffers. You would be able to claim dependency exemptions as well as a deduction for your spouse’s traditional IRA contributions.
Tax credits involving childcare (for custodial parents) as well as an earned income credit (if you are a low-income household) are available as well to take advantage of for joint filers. With changes in our tax laws that took place about six months ago, you may want to consult with a CPA or other qualified tax expert to determine the best way to file your taxes in the year of your divorce.
If you are legally divorced on 12/31 you can file as a single person or as a head of household. The next best option after joint is to file as head of household. To do so you must have lived separately from your spouse for the prior six months and the home where you reside must have been the main residence for your children.
In the event that you paid more than one-half of the costs of that house and are able to claim an exemption for your child(ren) that year then go ahead and file head of household.
Filing your taxes separately from your spouse
If you are able to do so and choose to file separately from your spouse you would have no liability for your spouse’s errors or purposeful misrepresentations made in their tax return. Interestingly your spouse can claim you as an exemption if you did not work (and vice versa).
If you are on the hook for paying alimony (not spousal maintenance) then you can deduct those costs as well on your separate tax return.
Consulting with a tax expert in addition to the Law Office of Bryan Fagan, PLLC is your best case scenario
The attorneys with the Law Office of Bryan Fagan, PLLC are not tax experts and we are not able to give formal advice regarding taxes. We will, of course, do our best to guide you and put your interests ahead of our own, but to get the best possible advice on this important subject please meet with a CPA or other person with expertise in this area. Today’s blog post hopefully gave you a little bit of working knowledge to begin that discussion with.
In the meantime, if you have any questions about divorce and taxes please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. It would be our pleasure to meet with you in a free of charge consultation in order to answer any question you have and to speak to you about our office and the services we can provide to you as a client.
If you want to know more about what you can do, CLICK the button below to get your FREE E-book: “16 Steps to Help You Plan & Prepare for Your Texas Divorce”
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Other Articles you may be interested in:
- How to negotiate a divorce settlement with taxes in mind
- Taxes and Divorce: How to avoid mistakes when filing during a divorce
- Which parent claims the children on their taxes after a Texas Divorce?
- Who Gets to Claim the Children as a Tax Exemption on the Tax Return in Spring, Texas?
- The Dirty Trick of Damaging, Destroying, or Selling Marital Assets in Texas
- 6 Mistakes that can Destroy Your Texas Divorce Case
- How Social Media Can Hurt You in Divorce
- Getting Ready for a Hearing On Temporary Custody Orders
- Can I sue my spouse's mistress in Texas?
- My Spouse Has Accused Me of Adultery in my Texas Divorce and I Haven't
- When is, Cheating Considered Adultery in a Texas Divorce?
- Sex, Lies, Rock-and-roll, and Adultery in a Texas Divorce
- Can I Sue My Spouse for Mental Abuse in My Texas Divorce?
Law Office of Bryan Fagan, PLLC | Houston, Texas Divorce Lawyers
The Law Office of Bryan Fagan, PLLC routinely handles matters that affect children and families. If you have questions regarding divorce, it's important to speak with one of our Houston, TX Divorce Lawyers right away to protect your rights.
Our divorce lawyers in Houston TX are skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan, PLLC by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan, PLLC handles Divorce cases in Houston, Texas, Cypress, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.