When it comes to issues of maintenance, claiming dependent exemptions, and allocating deductions, there are important tax considerations. Understanding the tax ramifications of each issue is often critical in ensuring compliance with the Internal Revenue Service Code and avoiding significant penalties.
With tax season upon us, the follow is a brief overview of basic tax rules and/trends related to divorce:
-Maintenance is always deductible as income for the payor spouse and includible for the payee spouse as income.
-When minor children are involved, and both spouses are employed, the parties will frequently alternate claiming the dependent as an exemption.
-For parties undergoing a divorce, the party residing in the marital residence and paying the mortgage and property taxes will frequently claim all of the tax deductions associated with the residence. If the other party resided in the house part of the year, the deductions will be pro-rated accordingly.
If you are undergoing a divorce and your spouse refuses to comply with tax law or he or she will not file in a manner that you believe will generate savings, there are actions your lawyer can take to compel compliance and an equitable division of any refund.