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Divorce and Taxes

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Will New Tax Laws Complicate Divorce in 2019?

Some are saying that the 2019 tax bill is complicating divorce for women. And they are right. For those whose divorces will be finalized after December 31, 2018, there will be repercussions. The new law makes spousal support (sometimes referred to as alimony) non-tax-deductible for the payer and non-taxable for the recipient. This effectively eliminates the previous tax benefit of larger support payments. This is particularly noticeable in high tax states like California and New York where the deduction in place before the new law took effect could save top earners up to 50% in taxes. Since women are more…

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What To Know About Taxes In A Divorce Or Separation

Divorce is not an easy time for most couples and their families. However, a question whose answer is easy to respond to is the tax implications of a legal separation or a divorce. It has been observed quite often that there are several people who end up paying an exorbitant amount as tax after their divorce. It happens as they are not familiar with the implications in the beginning. After all, a family goes through a crucial transition and hardly enjoys paying a big sum in taxes due to a breakdown in the relationship. Thus, it makes sense for the…

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Factors to Consider Before Accepting a Lump Sum In Your Divorce Settlement

Are you one of those couples who are in the most of your divorce settlement negotiations? If that is so, you should contemplate properly before angering to accept a lump sum as your settlement. In case the non-earning spouse is offered a lump sum in lieu of his or her divorce settlement. The money is needed to support that person’s future lifestyle. However, it often gets quite abstract. If you are trying to ascertain whether the lump sum offered to you is adequate or not the most important factors to consider are: The plans for investment returns or the growth…

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Should You File Taxes Separately or Jointly During Divorce?

In case your divorce is not yet finalized, you could file joint return if you remain married at the end of a tax year or as of December 31. Both husband and wife must provide consent to this filing. If there is no consent and you are still married, then your options are to file “married filing separately” or “head of household.”  When you check the “married filing jointly” box, it is represented to the tax authorities that you are married. This is valid even if you in reality separated and there remains no court judgment which ends this marital…

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Tax Issues That You Need To Know In A Divorce

Getting divorced? Be prepared to do your own taxes from now on. One of the many headaches of individuals who have recently gone through a divorce is coping with tax issues. Until now you must have filed your taxes as a couple but now the rules will change. You will realize that there are certain issues which you need to understand before you can file your taxes. Here are some of them which you need to look at the next time you file your taxes. Your filing status Before you file your tax return, determine your marital status at the…

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Preliminary Financial Disclosures Are Necessary In A Divorce

Preliminary financial disclosures have a crucial part in a divorce. Documents detailing the debts and assets of the parties (separately and jointly held) in a divorce need to be prepared. Omission of any debts or assets, intentionally or unintentionally, can affect the outcome of the divorce. California divorce laws require both parties in a divorce to prepare preliminary financial disclosures or else a divorce will not be granted. The Schedule of Assets and Debts (FL-142) and Income & Expense Declaration (FL-150) make up the preliminary financial disclosures that have to be submitted by divorcing couples in California. All separate assets…

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The Need for Financial Disclosures In A Divorce

In California divorce cases, a financial disclosure known as a “Preliminary Declaration of Disclosure” is a legal document declaring your income and your expenditures, what you own and how much you owe in terms of assets and liabilities is required.  It a legal document that both parties have to prepare and serve separately while filing for a divorce. It is important that this legal document has all the correct information because it is going to be thoroughly scrutinized by your spouse’s attorney. Completing a divorce financial disclosure  A divorce financial disclosure is a very crucial piece of legal proof of…

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Should You Keep Your Marital Home After The Divorce?

A divorce means dividing your properties and assets. For many couples, dividing their marital home becomes the biggest issue. It is their most valuable asset and neither of the two spouses wants to part with it. The primary residence has significant financial and emotional importance. But deciding whether to keep your marital home after the divorce or not should not be decided based on emotions. Thoughtful analysis is required before you take any decision. Or else you may end up regretting your decision. Ask yourself questions from a financial point of view before deciding on keeping your marital home. Is…

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Marital Debt – What You Need to Know When Getting a Divorce

During a divorce, the division of assets – whether financial or property often take top billing. You’re probably also weighing options to decide whether you will be able to resolve differences and come to an agreement on how to split up your valuable possessions. But there’s one area that doesn’t always get center stage but could be more important than your assets. And that’s the division of debt. Why division of debt is so important Debt has the potential to be as debilitating as not being able to negotiate a reasonable alimony. Just as a dependent partner can struggle if…

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A Guide to the IRS Release of Claims and Exemption Form

The IRS release of claims and exemption form, also known as the IRS Form 8332, is actually two forms instead of one. One of the forms is the release form, while the other is the revocation of release form. What is this release and revocation of release of? This is the claim of exemption that concerns the child tax credit, also known as child dependency exemption. The IRS release of claims and exemption form is relatively easy to fill out, with it being self explanatory for the most parts. Having said that though, are most parents aware of this? The…

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