Tax Issues in Divorce.

By Robin Roshkind, Esquire, West Palm Beach, Florida

There are many ramifications of a divorce settlement, and one that can have enormous effect… is taxes.  Present value of future monies, businesses, income, child credits, and more, need to be considered in a settlement proposal for the actual effects of the settlement.

Divorce lawyers generally do not have a tax law background and in fact there are usually disclaimers to that effect.   Issues to consider include: 

 1.  head of household exemptions 

2. child tax credits

3. business valuations  

4. medical and dental expenses for dependents  

5. alimony as taxable to the recipient, and child support as taxable to the payor     

6. property transfers incidental to a divorce  

7.  professional fees paid  

 8.  tax credits  

9.whether or not to file joint tax returns

Most lawyers work with forensic CPAs and tell clients to consult with their tax advisors prior to signing any divorce settlement agreement.  This is because the tax ramifications can have different effects on the equalization of assets and debts than what they actually appear to be.  For more information about this or other divorce topics, consult with one of the attorneys at ROBIN ROSHKIND, P.A. at 561-835-9091 or click on the Firm’s web site at www.familylawwpb.com.

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Divorce and taxes…things you need to know.

By Robin Roshkind, Esquire, West Palm Beach, Florida

If you are contemplating divorce as well as bankruptcy, there are three things that cannot be discharged in bankruptcy court, that being alimony, child support and taxes due the IRS.

While divorce lawyers are not tax advisors, there are many tax ramifications of divorce.  It is helpful, almost imperative, to get an accountant on your side.  Certainly where children are involved, there are the child exemptions as well as head of household tax credits.  Usually the parent with whom the children reside most of the time gets the head of household exemption.

By agreement of the parents, or by court order, the child exemptions can be shared.  This can occur in several ways.  Each parent can take one child  exemption per year if there are just two children.  Or they can rotate total exemptions every other year. 

There are also tax ramifications in valuing assets of the marriage.  For example, if a marital home has equity of $100,000 and there is also a bank account for $100,000, depending upon other circumstances, they may not be of equal value after the tax considerations.  What might seem a fair split on its face, may not be after taxes.  So it is important where there are substantial assets of the marriage to consult a tax advisor as well as your attorney. 

For more information on this or other divorce proceedings, click on the Robin Roshkind, P.A. website at www.familylawwpb.com or set an appointment to consult with one of the attorneys at the Firm by calling 561-835-9091.

Divorcing before the end of the year…why and why not?

By Robin Roshkind, Esquire, West Palm Beach, Florida

Timing of a divorce often includes many customized factors.  People may wait until the marital home sells before they divorce.  They may wait to divorce when the youngest child goes off to college and is out of the house.  They may wait until just after Christmas???  Yes, often couples decide to divorce at this time of year for tax reasons…or a fresh start to the new year.   It makes life a little simpler for marrieds and singles.

If you are married until December 31, 2008, you must file your 2008 taxes as a married person.  You spent the year married.  You can still file as a couple or as a married filing separately, but you are married in the eyes of the IRS.  If you divorce before the year is out, you must file as a married for 2008, but the good news is in 2009 you can file as a single.  You may also have head of household deductions for children living with you.  And you can tap the child tax exemptions for 2009 if you are the custodial parent, that is the parent with whom the children live for a majority of time. 

Oftentimes, couples rush to divorce court to execute the divorce papers before the year is out.  This also gives a fresh start for the new year.  On the other hand, many couples wait it out…hoping to stay together for the holidays to celebrate as a family, and for the sake of the children.  This puts the marriage into the next year, and couples must file as marrieds even if they are only married for a small portion of the new year.  There are many reasons to divorce before the year is out.  Talk to your tax advisor before you call in the lawyers.  For more information, click on the website of Robin Roshkind, P.A. at www.familylawwpb.com or consult with one of the attorneys at the Firm by calling 561-835-9091.

A Divorce Checklist…all things considered

By Robin Roshkind, Esquire – West Palm Beach, Florida

Divorce and taxes, divorce and health insurance, divorce and the marital home, divorce and credit, divorce and sex, divorce and children, divorce and child support, divorce and the computer, divorce and your cell phone, credit cards, bank accounts…the list can go on and on and on!  There is so much to think about when you decide to divorce that it is overwhelming for the lay person.  So here is my own check list to help you get through it:

  1. Tax ramifications.  Before signing any marital settlement, seek an independent tax advisor.  Most divorce attorneys, myself included, are not tax experts. 
  2. Attorneys fees and costs.  Who is going to pay?
  3. Children’s issues.  These include time sharing, where and with whom the child will live, child support, vacations, travel to and from the other parent, schooling, extracurricular activities, clothing and personal effects.  Parents need to collaborate on these issues for the well being of the child. 
  4. Marital home.  Is one spouse going to buy out the other?  Should the home be listed for sale to a third party?  Do you need to refinance or do a short sale?  Should one spouse stay in the home until the children are grown?   Divorcing parties need to agree, or a judge will micro manage this issue.  It is the same for any other real estate investment property, time shares, vacation homes, rental income.
  5. Stuff.  Who is going to get what stuff…did the spouse bring the antique silver into the marriage?
  6. Family pets.  Pets are not people and under the law they are viewed the same way that “stuff” is.
  7. Joint accounts.  Bank accounts, credit cards, car insurance, cell phone accounts, utility accounts…these all need to be separated.  Discuss the timing with your attorney.
  8. Gifts.  Gifts between spouses, such as jewelry or the big screen TV.  These need to be “assigned”.
  9. Debt.  Mortgages, car loans, credit cards, IRS, lines of credit…these need to be “assigned” also.
  10. Marital waste…on drugs, alcohol, gambling, shopping, a paramour.  This issue is referred to in Florida as dissipation of marital assets.  It is a serious issue and could cost you.  Consult with your attorney.
  11. Alimony…there are all kinds: bridge the gap, rehabilitative, lump sum, permanent periodic, temporary.  Alimony is statutory and is serious business, so consult with your attorney.
  12. Relocation with children.  This causes many problems within the family.  It is very often left to the judge to decide.
  13. Name change…usually the wife has the option of restoring her former name during divorce proceedings.
  14. More stuff.  Cars, boats, trucks, tools, equipment, computers.  Decide who gets what or a judge will do that for you.
  15. The business or businesses.  If it was formed during the marriage, it needs to be addressed.
  16. Paper trails.  Emails, photos and other paper trails.  Consider this:  they could be good for you or bad for you.  Be careful.
  17. Friends and family…same as above, good or bad.  But you need to follow the advice of your experts such as lawyers, CPAs, shrinks, doctors, financial planners and the like.  That’s what you pay us for!   

For additional information on any of these, please call my law firm, Robin Roshkind, P.A., for a consultation (561-835-9091) or visit the firm’s website at www.familylawwpb.com.