Don’t overlook this important element of divorce planning.
- While not typically top of mind during divorce, taxes are an important consideration, especially completing your tax return.
- Consult with an attorney or advisor who understands the tax laws so that planning can be done before you agree to a settlement.
- Being equipped with information regarding divorce,taxes, and your tax return early on can help you work towards a reasonable divorce settlement agreement.
Divorce is emotionally and financially difficult and there are so many things for a divorcing couple to think about and work through. Taxes are not typically top-of-mind during this challenging time, but there are very important decisions that need to be made to ensure that tax returns are properly filed and tax liabilities are shared as required by state distribution laws.
It’s important to consult with an attorney or advisor who understands the tax laws so that planning can be done before you agree to a settlement. A tax attorney or tax accountant can review your divorce or separation agreement to determine the tax consequences of the agreement, and help plan so that you will not incur any current or deferred tax liabilities that you were unaware of when executing the divorce agreement. Your advisor will look at many tax issues from a technical standpoint but there are some basic things that will be helpful for you to know.
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