Ohio readers know that the financial aspects of ending a marriage are complex, and it can be difficult to fully understand the implications of decisions made during this process. It is critical to explore the long-term impact of issues like child support and alimony and how these matters could impact taxes. Overlooking the impact that divorce can have at tax time can have negative consequences.
First of all, one’s filing status will certainly change. Instead of filing jointly, a person who has received a decree of divorce or has legally separated within the past year will file as a single taxpayer. At this point, if a person is paying alimony to a former spouse, that individual can deduct that amount. Spousal support is taxable income starting in the year that the payments began.
Child support will have minimal impact on taxes as these payments are not taxable or deductible. Depending on custody arrangements, a parent may not be able to claim a child as a dependant. Additionally, it is thought that property division will have minimal impact on taxes, but it is worthwhile to explore how retaining ownership of certain valuable assets, such as real estate, could impact tax obligations.
The financial consequences of divorce will have a significant impact for years, even decades, after a the final decree has been signed. When walking through this complex process, it is important to work with a lawyer who can help one make decisions that are practical and allow for a strong financial future. It is best to begin by seeking a case evaluation with an experienced Ohio family law professional.
Source: willitsnews.com, “Taxes and Finance: The taxing side of divorce“, James Angell, Nov. 8, 2016