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Divorcing couples should consider tax implications, other costs

On Behalf of | Jan 14, 2013 | Alimony

The number of divorces that happen each year in Columbus do not surprise most people. Like in other cities, most residents of Columbus have come to understand and accept the fact that divorce happens. One major part of the divorce process is the alimony determination, something that some splitting spouses dread while their counterparts may look forward to it.

This is an expected part of many divorces in Ohio, but few realize that this can lead to unexpected costs once the divorce is finalized and the payments begin to be made. For instance, while many realize the tax benefits of being married, some of those people do not consider the tax implications of spousal support. The person being paid alimony must account for taxes because it is considered a form of income to the Internal Revenue Service. The person paying the alimony is allowed to do so tax-free.

Other unexpected costs of divorce include an increase in the costs of car and homeowner insurance. Many married couples have their cars and homes, as well as other property, insured under the same provider. This gives them several discounts that disappear once these items are divided and insured under different companies or accounts. So if the divorce sees the home go to one person and not the other, the discounted insurance prices will no longer be apparent.

Another cost that many do not think about when splitting is health insurance. In many cases, one spouse provides insurance for her or his family through the employer she or he works for. The other spouse may not work or may have chosen not to receive coverage since she or he was already covered by the plan belonging to the other spouse. When divorced, this changes and the former spouse often cannot remain on the family’s plan.

Although many challenges come with the decision to divorce, in the long run, the choice is often one that brings a brighter future for all those involved. Knowing what to expect and preparing for the steps ahead can help ease the effects of those changes.

Source: Huffington Post, “Six Unexpected Expenses Divorcees Face,” Susan Saper Galamba, Jan. 8, 2013

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