Divorce & Taxes

Divorce and Taxes in Texas

Helping You Navigate the Complexities of Divorce

Divorce disrupts most things in life from holidays to quality time with children, and taxes. Financial disruption can be deeply confusing for divorcing or newly divorced spouses, so it is important to choose the right legal counselor for your specific case.

The Law Office of Bryan Fagan, PLLC has extensive experience with complex divorce cases. Our team of highly qualified legal professionals can guide you through the divorce process from filing to the final decree.

When you need aggressive representation, contact our divorce and taxation attorney in Houston by calling (281) 810-9760.

Divorce in Texas

Spouses may file for contested or uncontested divorce in Texas. A contested divorce involves a longer court process, higher costs, and a plethora of other issues. Typically, a contested divorce occurs when spouses do not agree on one or more issues within the divorce like child custody or property division. An uncontested divorce happens when spouses agree on all matters in the divorce settlement.

Many contested cases are also fault based. This means that a spouse has filed for divorce based on the fault of the other. For example, if a spouse is guilty of adultery or is abusive their partner may file for a fault-based divorce. In rare cases a fault-based divorce can be uncontested if both spouses recognize the claims as truthful.

Property disputes also complicate divorce cases. Texas is a community property
state which means that any property acquired during the marriage and/or
with joint funds is considered community property and will be divided equally.

Taxes During Divorce

Taxes play a significant role in divorce in many ways. For example, tax documents are often used to prove ownership and assets during the property division phase of a divorce case. Taxes can also be a motivator for divorce if one or both spouses are audited by the IRS. Doing so however, is illegal and considered tax fraud.

Filing during a divorce can be complicated as well, especially if the divorce is not finalized. In that case, the spouses are legally obligated to maintain their marital status on the tax documents until their divorce is final. The option to file separately maybe appropriate, but spouses should consult a tax expert and/or divorce attorney before doing so.

In many cases, one spouse is in charge of all the tax related responsibilities. If one spouse handles the taxes, their partner may not be able to access financial documents which can jeopardize their financial stability. Innocent spouses who are victims of financial abuse have grounds for divorce and may qualify for relief from the court.

Taxes After Divorce

It is also important to note that taxable investments and IRAs are subject to property division which could change their taxable value. Retirement accounts, pensions, and investment yields may also be vulnerable during divorce and as taxable assets, may lose value as a result.

Additionally, lump sum payments during property division and alimony are taxable. This means that the settlement amount and spousal support may be worth less than the original amount after taxes. So, it is important to negotiate a divorce settlement with taxes in mind.

Why You Need an Attorney

If you are filing for divorce, you must consider the impact on your finances including taxes. Divorce and property division are hard enough, so it can be difficult to plan for life after divorce. It is crucial that you consult with a qualified attorney before filing for divorce to ensure that your assets are protected, and your taxes will not become over complicated.

The Law Office of Bryan Fagan, PLLC has the experience you need to protect your assets, and plan for the future while filing for divorce. Our knowledgeable and aggressive legal advocates can assist you with the filing process and guide you every step of the way until the final decree. We understand the impact divorce can have on all aspects of your life including taxes and we work tirelessly to protect your interests.

Schedule a consultation with our Houston divorce and taxation attorney today.

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