Divorce, which is difficult mentally and emotionally, can be made worse by tax consequences, both foreseen and unforeseen.
A divorcing couple should be aware of the tax ramifications of all transactions involving money or property. A prudent divorce attorney advises his or her client on any likely tax consequence from the distribution of property in a divorce.
In general, two considerations are: tax consequences, which include incomes and deductions of the spouses, number of dependents, credits, tax rates and the amount of tax paid to avoid penalties; and legal liabilities, particularly those associated with a married couple filing jointly, which include joint and several liability.
Divorce, support, and property settlement involves money and property – sometimes a lot of money and a misstep in planning often work to the benefit of the tax collector. In general, the wealthier the couple are, the more tax questions and issues may come into play in a divorce, but even a merely prosperous middle-class couple who are divorcing should consider the tax implications and tax decisions.
Editor’s Note: The above information has been provided by Divorce and Taxes Information. Provided by: Introduction to Divorce and Taxes – Divorce Source