Montgomery County Family Lawyer Discusses Taxes and Divorce: Issues to Raise with Your Accountant or Other Tax Professional
This time of year, many Americans will begin preparing their state and federal income tax returns. However, filing your taxes after a divorce or separation may be more difficult than when you were in an intact marriage. While we do not provide tax advice, the family lawyers at Vetrano|Vetrano and Feinman LLC can highlight questions you should discuss with your accountant or other tax professional. The first consideration is your filing status. In Pennsylvania, we do not have a legal separation. Therefore, the only filing statuses available are single, married filing separately, married filing jointly or head of household. The single tax filing status is only available to individuals who are divorced or were never married. If you are separated, you must use one of the other three statuses.
Family lawyers work with our clients (and the clients’ tax professionals) to consider the tax consequences of a support or equitable distribution arrangement. Many people are unaware, if parties to a divorce file separate tax returns, alimony pendente lite (alimony pending the divorce) and spousal support are taxable income to the recipient and tax deductible to the payor. The recipient must be aware of this when support is determined so he or she can decide if it is appropriate to make estimated tax payments.
There may also be tax consequences to dividing marital assets such as a home, investments and retirement assets. If parties divide an investment account, they will also share the tax consequences associated with that asset. A family lawyer at Vetrano|Vetrano and Feinman LLC can work with you to determine a fair distribution of your assets taking into consideration the tax consequences of the division.
The attorneys at Vetrano|Vetrano and Feinman LLC can also point out questions you should raise with your tax professional. If you have children which parent should claim the kids? If you own property, who should claim the mortgage interest deduction or will you and your spouse share it? Tax issues are specific to each case. Contact a family lawyer at Vetrano|Vetrano and Feinman LLC at 610-265-4441 to consider how your situation will impact your tax liability or refund.