May 7, 2012

We're Going Wrong: Tax Implications of Divorce

It may be time to find a divorce lawyer (and a GREAT tax accountant) if you open your eyes one morning and your spouse sings this to you:

Please open your eyes
Try to realize
I found out today we're going wrong

Please open your mind
See what you can find
I found out today we're going wrong

Divorce is the final termination of a marital union, canceling the legal duties and responsibilities of marriage and dissolving the bonds of matrimony between the parties (unlike annulment which declares the marriage null and void). Divorce laws vary considerably around the world but in most countries it requires the sanction of a court or other authority in a legal process. The legal process for divorce may also involve issues of alimony (spousal support), child custody, child support, distribution of property and division of debt.

Personally speaking, clients that are going through divorce are the toughest to deal with. There are alot of emotions involve. Alot of the times, they didn't take into account the tax implications of divorce. For example, who will claim the children on their tax returns. I would recommend to consult with your tax accountant throughout the divorce procedures. The worst thing you can do is talk about the divorce when the tax return is ready to be filed.

If you need great information regarding the tax implications of divorce, check out this Forbes article written by Peter J. Reilly

“My husband and I have never considered divorce... murder sometimes, but never divorce.”
― Joyce Brothers

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