On behalf of North Tampa Legal Group posted in child support on Wednesday, September 13, 2017.
A person facing the end of a marriage has lots of details to manage. One detail that may not immediately pop up is how the breakup will affect future tax returns. Taxes, like divorce, are another one of those intimidating issues that most people will avoid if at all possible. But anyone in Florida going through a divorce will eventually need to understand how the change will affect how they file their taxes from now on. Child support and child custody can affect how one files, as well as alimony and retirement accounts.
It would be improper for the government to create a situation where it encourages divorce, so child support payments are neither taxable or tax deductible. One parent or the other can claim the child as their dependent, but both parents cannot. The dependency exemption is usually given to the parent who provides more than half of the child’s support through the year, but not always. Forms describing the conditions for the exemption, and forms that must be filled out, can be found with the Internal Revenue Service (IRS).
Alimony is tax deductible. Spouses can exchange property between each other without taxation during the marriage and its dissolution. Allowances also exist for the transfer of retirement accounts without penalty.
Each person’s tax situation is unique. It is important to keep in mind how certain aspects of divorce, like alimony, will affect the taxes, and how other situations, like child support, will not. When the IRS is involved, things can get pretty tricky, and a person may want help. Some individuals choose to use the services of an experienced Florida family law attorney to help them prepare for tax issues after the divorce.
Source: Forbes, “Taxes And Family Law: A Cheat Sheet Of What You Need To Know“, Stephen Hicks, Sept. 8, 2017