A topic that applies to legions of people and is often noted to be vitally important yet not well understood obviously requires affected individuals to do some research.
In the realm of divorce and where taxes are concerned, a bit of homework will go a long way, helping divorcing couples see the broad and important applicability of taxes and how smart strategies can stretch dollars.
That’s important, right?
Of course, the tax realm is widely conceded to be hyper-complex and a bit of a slippery slope, so it may be worthwhile for a divorcing spouse to timely connect with an experienced family law attorney who routinely represents a diverse clientele in that practice area.
Tax-related matters “are an essential aspect of most divorce cases and must be carefully handled prior to the dissolution of the marriage,” notes a recent Forbes business article.
Consider the timing of divorce, for example. The date that a couple’s divorce takes legal effect can have material consequences for a tax-return filing.
So, too, can the particulars decided upon relating to something like spousal maintenance (alimony), which Forbes points out is added to the income of a recipient and allowed as a tax deduction to the payer.
A seasoned divorce lawyer can help a divorce client understand how pension/retirement accounts and taxable events intersect, as well as help them invoke processes (like obtaining so-called QDROs) to avoid penalties.
Forbes also mentions the win-win situation that some couples can implement through taking advantage of “unallocated support,” a strategy that allows the legal shifting of income from a higher-income paying spouse to a lower-tax-bracket recipient.
An experienced attorney who is tax-sensitive and widely knowledgeable concerning smart tax planning in the dissolution process can provide detailed and on-point guidance concerning this important divorce factor.