And You Thought Death and Taxes Were Bad: Divorce and Taxes

June 24, 2012 /24-7PressRelease/ -- When a couple is going through a divorce, there are a host of emotional, organizational, and financial issues that have to be considered and dealt with. Child custody and support, spousal support, if any, who gets the house, and a thousand other details crowd your attention. One issue that may not be foremost in your mind is taxes. While you and your soon to be former-spouse work out the details of your new situation, the IRS will still want its cut. Divorce is a Contract, but not with the IRS An important element of your divorce to keep in mind is that your divorce agreement or settlement is a personal contract between you and your former spouse. The terms control your interaction with each other, but not third parties, like the IRS. Cooperation may be Lacking; Plan for it One problem for newly divorced couples is the lack of cooperation that often develops. You may need specific financial information to accurately file your taxes, but your ex may not be all that interested in helping. Because of this, you probably want to begin the process as soon as you are able, in case "delays" develop in extracting records from your ex. The sooner you begin, the more likely you are to avoid being caught by filing deadlines. If your former spouse were cooperative, a good scenario would be to have a single accountant or tax preparer work on both returns. That way, all your numbers will match and not invite the IRS to audit your tax return. Married Filing Jointly or Married Filing Separately You also have to determine how you will file; married filing jointly or married filing separately, if you were still married at the end of the year, i.e. you haven't received a final divorce order from the court. You should prepare a return both ways, to figure out which is best economically. Filing jointly, as the name implies, requires cooperation from your former spouse, as have to include all of your income, exemptions, deductions and credits for both spouses on the return. It also makes you liable to the IRS for all of the taxes due, if your former spouse fails to make their payment. If you file separately, you only report your own income, exemptions, deductions and credits on your individual return. Another advantage of the filing separately is you can amend the return later if necessary. If you file jointly, it cannot be amended to change status. More Cooperation? There are other elements of your settlement that may require cooperation from your former spouse. Certain aspects of filing your taxes need to be carefully considered in you settlement. For instance, there is only one dependency deduction per child, so if you have an even number of children, you can split the deduction; if you have an odd number, you need to decide who will receive the extra deduction. And, of course, there is an IRS form that needs to be filed if you give a deduction to your spouse. These are all topics you should discuss with your divorce attorney and when necessary, other professionals, like tax accountants or lawyers. They can be complex determinations, and obtaining professional assistance can help ensure you make the right decisions. Article provided by The Law Offices of James A. Cuddy, LLC Visit us at www.jamescuddylaw.com --- Press release service and press release distribution provided by http://www.24-7pressrelease.com