Washington Divorce Tax Matters Lawyer
Going through a divorce is extremely stressful, and the process is highly emotional. When you separate from your partner, it will impact every area of your life, including your taxes. While you are legally required to deal with your taxes during divorce, doing so on your own is incredibly challenging and complicated. Our Washington divorce tax matters lawyer can provide the professional advice you need to make it easier.
The Tax Cuts and Job Act
The Tax Cuts and Job Act has significantly changed a number of tax issues including depreciation, deductions, and tax credits. Under the Act, taxes no longer apply to alimony or spousal support paid during or after a divorce is finalized. This means that neither spouse is required to report it on their taxes if their divorce or legal separation was finalized on or after January 1, 2019.
Alimony and spousal support continues to be classified as income for divorce decrees and separation agreements executed on or before December 31, 2018. This means recipients are still required to report it as income and payers can deduct it from their income taxes. However, those paying must follow all rules pertaining to alimony payments.
Tax Implications on Property Division
Property division is a part of all divorces in Pennsylvania. The property divided between you and your spouse is not taxable. This means that if you receive property from your spouse, it is not considered taxable. The recipient simply keeps the cost basis to the degree that the property is transferred.
During divorce, a couple must account for both a stock’s cost basis and the fair market value of it. When an item is sold, or funds are withdrawn from a retirement account, there may be tax consequences. It is imperative that you speak to a Washington divorce tax matters lawyer who can advise on what these are.
Filing Taxes After Divorce
If your divorce case is not finalized prior to December 31, you will still be treated as a married couple for tax purposes. If your divorce is finalized after January 1 of the following year, it may still be possible to jointly file taxes and enjoy the advantages that come with doing so. After the divorce is finalized your tax status, as well as that of your spouse’s, will change.
Due to the fact that there are certain benefits associated with filing taxes jointly, a couple may decide to time their divorce for the first half of the year. It is important to speak to a lawyer who can advise on the tax implications of divorce and how you should time your case.
Call Our Tax Matters Lawyer in Washington Today
At Bunde & Roberts, P.C., our Washington tax matters lawyer can explain the tax implications of ending your marriage and advise you on how to protect yourself. Call us now at 412-391-4330 or chat with us online to schedule a consultation with our experienced attorney and to learn more about how we can help with your case.
