During the course of a divorce, most people spend a great deal of time and effort considering how their financial circumstances could change once their marriage comes to an end. Even so, one of the most often overlooked topics regarding divorce is the impact this change in family status could have on both spouses’ tax obligations. It is important to understand that a Florida divorce will have a great deal of impact on each party’s tax standing for many years to come.
For example, parents who share children will need to determine how to divide parenting time and responsibilities as part of their divorce. The parent who will retain the bulk of child custody duties will also have a change in his or her tax filing status. In some cases, custodial parents can qualify to file their taxes under the head of household designation. That can have a great deal of impact on the eventual bottom line.
Another related issue involves determining which parent will have the right to claim shared children as dependents on their tax return. This is not a cut and dried matter, and families can customize a custody agreement in any manner that suits their needs. For example, parents can agree to alternate years, which allows both parents to share in the tax benefits associated with their children.
When working toward a divorce settlement, Florida spouses should take the time to consider any and all financial ramifications. This includes how the divorce will impact their tax standing. In some cases, making wise decisions concerning tax issues can save a great deal of money in the long run.
Source: wtop.com, “5 things women should know about taxes after divorce“, Dawn Doebler, March 22, 2017
