Tax Issues For Couples Going Through Divorce

April 27, 2012 - PRLog -- Financial matters are a big part of a Virginia divorce as couples have to think about:

•   division of property;
•   spousal support;
•   the effects of divorce on their credit score; and
•    how the end of a marriage can affect tax issues.

Doing your taxes during divorce is one of the mundane but important tasks you will have to face as you move on from married life.

If you're already divorced, things won't be as complicated as they can be if you're in the midst of a divorce. This transitional time can raise a number of questions. Do you file separately or jointly? How will dividing assets affect your taxes? Who claims the children as dependents?

It's important for divorcing couples to sit down and discuss these things before filing their taxes. Even if you and your ex are not on the best terms, it's wise to put your personal problems aside and address your financial matters in a calm and logical way.

Issues Regarding Taxes During Divorce

The first question many couples have is whether to file jointly or separately.  According to the law, if you are still in the midst of your divorce when you file your taxes, you file as married. Whether you choose to file separately or jointly is up to you.

In Virginia divorce, there are various kinds of support, and you may have questions about how taxes apply to them. For example, spousal support is usually deductible to the person paying (the payor) and taxable to the one receiving the money (the payee). Some couples have an agreement that makes it the other way around. If so, they need to attach the agreement, court order, etc. to their tax returns.

Child support doesn't affect taxes. That means that the payee is not taxed on payments and the payor does not get a deduction for his or her payments.

When a couple splits up, the parent with primary custody is usually the one who claims the children. In cases where this arrangement does not work for whatever reason, the parties can split the exemption.

Dividing assets for tax purposes can be difficult when a couple is still in the Virginia divorce process. For those whose divorces are already finalized, the details of how assets are to be divided will be laid out in the divorce agreement.

There is, however, some general info to remember.  For example, if 1 partner is liquidating a 401K or IRA, they will in most cases have to pay taxes on this income. The exception would be in cases of Roth IRAs or Roth 401Ks in which the taxes are already paid.

Tax laws can be hard to keep track of, as they change frequently, so the topic of taxes during divorce is a pretty tricky issue for some couples. Mistakes in filing can delay processing or cause inconvenient troubles, so it's important to seek help from a professional – such as a financial adviser – as well as your Virginia divorce attorney, so your concerns can be addressed.

Contacting a Virginia Divorce Attorney

Throughout your divorce proceedings, you’ll naturally have a lot of questions specific to your circumstances. Get your questions answered by requesting one of our FREE divorce guides for women, or reserving your seat at our monthly divorce seminar.

The Virginia divorce attorneys at Hofheimer/Ferrebee are committed to fighting for your rights, assisting in child custody disputes, and advocating that you receive everything you are entitled to and need in order to start your new life – 1-757-425-5200.


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