Taxes can be extremely stressful for Georgia taxpayers. Paying taxes in the midst of a divorce can be even more so. There are some factors to take into consideration as people are going through the trying times of tax preparation and divorce.
The date of a divorce can affect the status of how a person files. If the divorce is final by the end of the tax year, the filing can be as head of household or single. That filing can also be used by a legally separated person if the laws of the state where the person lives allow that. If the date of the divorce is after the end of the year, the filing will either be married filing separately or married filing jointly.
Consider the exemptions that can be claimed on the tax return. All deductions related with anyone who can be claimed as a dependent can be claimed on the return. These deductions can be claimed by the custodial parent, or the parent the dependent lives with more than half the tax year. The former spouses may want to keep in mind the adjusted gross income amount and the alternative minimum tax when deciding dependent claims.
The former spouses will have a year from the date of the divorce to transfer any assets without paying taxes. Keep a record of the original cost of any asset transferred, as that cost will be the basis for any sales price if the assets are to be sold at a later date. There are some assets that may have extra tax conditions and the tax laws on those conditions will have to be researched.
Everyone wants as little tax liability as possible, whether divorced, single or married. During and after going through a divorce, studying the Georgia and federal tax laws may be necessary. Many of the problems that may arise may require negotiation to ensure that both parties achieve a fair and comprehensive agreement on all material issues.
Source: courierpress.com, “A starting point for tax rules during divorce,” Tony Rubenacker, July 1, 2013