The Tax Consequences of Divorce in Orlando

As if divorce weren’t stressful enough, you may also need to consider the various tax implications of ending your marriage. Alimony, child support, and property division can all lead to tax issues in Florida. If you’re concerned about these issues, it makes sense to work with a divorce lawyer in Orlando who is familiar with both taxes and law.

You Will Need to File as a Single Individual

As a single individual, you’ll file your taxes differently after your divorce. Filing jointly with a spouse offers certain tax advantages, and these may no longer be available to you as a single person. Many people enjoy lower tax brackets during marriage. If you employed certain tax strategies that revolved around your marriage, you may need to consider alternative options as a single person. Simply put, you might need to pay more taxes as a single person.

Do I Pay Taxes on Assets I Receive During Property Division?

You might also be concerned if you received certain assets during the property division process. For example, you might have received a lump-sum payment of $100,000 in cash. Does this count as income in the eyes of the Internal Revenue Service? Will you need to hand over a significant chunk of this cash to the government when it’s time to file your taxes?

The answer is almost always “no.” As long as the transfer is directly connected to the divorce, it should not trigger any capital gains implications. Note that certain time limits may apply if you want to take advantage of this exemption. For best results, you should try to complete these transfers within one year of your marriage ending.

Addressing Child Tax Benefits 

As many parents know, there are certain tax advantages associated with having children. Florida and the federal government offer parents certain tax benefits and credits, and you might be unsure of who gets these benefits in the event of a divorce. The spouse with more parenting time after the divorce generally gets the child tax benefits. However, this situation can become complex in situations with true “50/50” custody splits. In this situation, the parents might need to take turns from year to year. For example, one parent might take the child tax credits one year, while the other parent might take the credits during the next year.

What About Alimony?

Alimony is neither taxable nor tax-deductible. If you receive alimony, you do not need to declare it as income. If you pay alimony, you cannot write this off as an “expense” or loss under your tax return.

Can an Orlando Divorce Lawyer Help Me?

An experienced divorce lawyer in Orlando can help you understand both the legal and tax implications of ending your marriage. Some of these implications may be somewhat unclear, and they depend on the unique aspects of your divorce. For these reasons, online research may fail to provide targeted education on this subject. On the other hand, a consultation with Steve Marsee, P.A. could offer more personalized guidance. Contact us today to get started with an action plan.

Source:

smartasset.com/taxes/taxes-single-vs-married