Frequently Asked Tax Questions and Family Law
Here’s some answers to frequently asked tax questions and family law cases.
Can we still file a joint tax return? You can file a joint tax return if you are still legally married on the last day of the year (December 31). If your divorce would otherwise fall earlier than the end of the year, you can have your Final Judgment state that the date of divorce is the first business day in January to preserve joint tax return status. This is sometimes, but not always, financially beneficial to the parties.
What if we want to file returns separately? You can always file separate tax returns. Sometimes there are advantages to file as two single people rather than filing a joint return or file married filing separately. If your divorce date is December 31 or you have a decree of legal separation by December 31, you will be able to file as two single individuals.
What are the effects of the date of separation? Generally, the date of separation marks the date that earned income ceases to be community property. There is sometimes conflict as to the date of separation and this can be a cause of litigation because it impacts property rights and has tax consequences.
Is our Marital Agreement or Final Judgment binding on the IRS? No! The IRS says what the tax law is, not your final judgment or Marital Settlement Agreement. This is especially true with Child Support and Spousal Support.
Is Child Support deductible?If the payment is called “Child Support,” it is not deductible. If the payment is labeled “family support” or “spousal support” it might be deductible if certain conditions apply. However, if there is an automatic decrease in the amount of “Family Support” when a child reaches a certain milestone such as age 18 or graduation from high school, then it is not deductible.
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