Who Gets the Deduction? Avoiding Tax Season Conflict
Tax Considerations for the Future
One of the most neglected tasks in divorce is figuring out how you will deal with your taxes after the divorce. Many couples fail to include guidelines for taxes in their separation agreements, and this almost always comes back to haunt them. In the midst of a divorce, and unless tax season is right around the corner, it’s easy to overlook this very important aspect of divorce.
Filing your taxes after divorce can be complicated. If you don’t already have a tax accountant, now is a great time to speak with one. Everyone should consult with a tax advisor if they are getting divorced so they can fully understand their tax liabilities and opportunities for tax breaks. If you are filing separately, you will need to decide who will get what tax break. It’s difficult to anticipate all the potential points of conflict you might face. You should consider negotiating agreements on:
- Whether to file jointly or separate (do some preliminary calculations; sometimes it benefits both spouses to file jointly their first tax season after a divorce)
- Who will claim any child tax credits
- Who will claim any child and dependent care credits
- Who will get the higher education credits or deductions
- Who gets to deduct mortgage insurance or PMI premiums
- Who will deduct approved medical expenses for your child
You may also need to decide how to structure your property division in a way that minimizes your tax burden. While property transfers between divorcing spouses are tax-free, retirement plan distributions typically aren’t.
These are just a few of the many tax considerations a divorcing couple should discuss. If left unaddressed in the separation agreement, these issues can lead to major disagreements down the road. While you should consult with a tax advisor to make sure you have all your bases covered, speak with an experienced Massachusetts divorce mediator if you need help negotiating a separation agreement with your spouse. Spending thousands to battle over tax deductions in court is counterintuitive.
Polly A. Tatum has the skills and experience needed to help you and your spouse peacefully negotiate detailed agreements on how you will handle your taxes post-divorce.
Based in historic Worcester with a satellite office in Northboro, MA, our firm serves all cities and towns throughout Massachusetts and Worcester County including, Auburn, Paxton, Leicester, Sutton, Grafton, Shrewsbury, Westboro, Northboro, Southboro, Holden, Sterling, Princeton, Worcester, Charlton, Millbury, Dudley, Spencer, Brookfield, Sudbury, Natick, Framingham, Hopkinton, Milford, Blackstone, Leominster, Fitchburg, Acton, Jefferson, Barre, Oakham, Cambridge, Newton, Marlboro, Lancaster, Bolton, and Hudson.
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