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Divorce can have major impact on taxation

For Georgia couples going through a divorce, financial considerations may be a paramount concern. Ending a marriage can carry with it significant financial consequences, especially in property division and spousal support. A split can have an impact on the financial health of both former spouses at a number of levels. One aspect of divorce which perhaps is considered less frequently is the tax impact.

Once a divorce is finalized, tax changes go into effect right away with ongoing effects. When it comes to divorce, a split finalized before December 31 of one year must be reflected on income tax returns filed for that year. On the other hand, if the divorce was only pending or not yet finalized by the end of the year, both spouses should continue to file taxes as a married couple, whether they use a joint return or file separately.

Another major concern for parents going through divorce can be the tax deductions and exemptions available for dependent children. Each dependent child carries a tax exemption that can be claimed by only one parent following the divorce. In most cases, the custodial parent who has the child the largest amount of time is eligible for the credit. However, that parent can voluntarily waive the exemption for use by the other parent as part of the divorce agreement.

There are other complex issues that can arise regarding after-divorce taxation, including the tax treatment of spousal support and the repercussions of the sale of assets received during property division. Family law attorneys can often provide guidance on these matters to divorcing clients.

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Hecht Family Law
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Alpharetta, GA 30004

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