Divorce taxation

Toms River Divorce Taxation Lawyers

Nearly 1 million couples divorce each year in the United States, many of them involving high assets and accumulated wealth. Divorce can be difficult and emotionally challenging for any couple, particularly when there are concerns about tax issues.

Taxation law and divorce intersect in many ways. When couples divorce, especially high-net-worth couples, a myriad of tax considerations come into play. Understanding these tax implications is crucial for divorcing parties and their advisors to make informed decisions and mitigate potential tax consequences. Our Toms River divorce taxation lawyers can help you.

How Does Filing Status Change After Divorce?

After divorce, your filing status may change from married filing jointly or separately to single or head of household, depending on your situation. Your filing status can impact your tax liabilities and eligibility for certain tax credits and deductions.

Is Alimony Taxable After Divorce?

Before 2019, alimony payments were tax-deductible for the paying spouse (payor) and taxable income for the receiving spouse (payee), which benefitted higher-earning spouses in reducing overall tax liability. Per federal tax changes in 2019, alimony is no longer deductible or required reportable income, which can significantly increase the payor’s tax liability in high-asset divorces while benefiting the payee with non-reportable income.

These tax implications can affect negotiations regarding alimony in high-asset divorces to account for the changes, such as the payor increasing payment amounts to offset tax liability. If alimony is derived in part or entirely from business income, the payments may be taxable income for the payee and deductions for the payor.

What Is the Tax Impact of Selling Assets During a Divorce?

Selling assets as part of a divorce settlement can trigger capital gains or losses. The tax implications depend on factors such as the type of asset, the holding period, and any applicable exemptions or exclusions. Working with a Toms River divorce lawyer who understands and anticipates capital gains tax implications is vital.

Do I Need to Amend My Tax Return After Getting Divorced?

If your divorce is finalized after you have already filed taxes for a particular year, you may need to amend your tax return to reflect your changed marital status and any relevant financial arrangements resulting from the divorce.

Are Legal Fees for Divorce Tax Deductible?

Legal fees related to obtaining alimony or tax advice may be tax-deductible. However, legal fees for obtaining a divorce or child custody arrangements are not tax-deductible.

Are Child Support Payments Taxable?

Child support is not taxable; however, dependency can affect taxes. Typically, whichever spouse claims the children as dependents benefits from tax credits and deductions that the other does not. Likewise, many high-asset divorces include provisions for paying children’s healthcare expenses, such as medical bills and health insurance premiums, that may result in tax implications for either or both parents.

Can I Claim My Child as a Dependent After Divorce?

Generally, the custodial parent (the parent with whom the child lives most of the year) can claim the child as dependent on their tax return. However, parents can agree to alternate years or make other arrangements regarding dependency exemptions in their divorce agreement.

How Are Retirement Accounts Divided in a Divorce?

High-asset couples often have substantial retirement accounts, such as 401(k)s, IRAs, and pension plans, that are typically considered marital property and subject to division during divorce, regardless of which spouse’s name they are under. A QDRO is often necessary for transferring or rolling over certain types of retirement accounts to avoid triggering early withdrawal penalties and immediate tax consequences. Dividing retirement assets in high-asset divorces requires comprehensive knowledge of tax implications to ensure a fair and equitable distribution, especially as withdrawals from certain retirement accounts may be taxable income.

Tax implications during divorce can have long-term negative consequences for spouses without exceptional legal guidance and advice. Divorces demand meticulous attention to detail and a comprehensive understanding of tax laws – particularly their consequences.

Zeigler Law Group, LLC Handles Taxation Issues in All Aspects of Divorce

Individuals involved in divorce proceedings need to understand tax implications to make informed decisions and comply with tax laws. Consulting with a Toms River divorce taxation lawyer at Zeigler Law Group, LLC can provide further clarity on these matters. Our team handles taxation law issues in divorce.

In addition to her 25 years of experience, Sonya K. Zeigler, Esq. holds a Master of Laws (LL.M.) in Taxation and specialized legal training for licensed attorneys, making her an invaluable ally and advocate to protect your best interests. With her keen financial knowledge and unmatched negotiation and litigation skills, Sonya has built an esteemed reputation within her niche for handling complex high-asset divorces and achieving favorable client outcomes.

Sonya brings a wealth of knowledge to her practice. Her dedication to her field is evident in her meticulous approach to tax matters, ensuring that her clients receive top-notch advice and representation. Her degree demonstrates her commitment to staying at the forefront of tax law and equips her with the tools to navigate complex tax issues effectively. Sonya’s reputation for excellence and her ability to provide strategic solutions make her a trusted advisor in the realm of taxation law and divorce.Top of Form

Our Toms River Divorce Taxation Lawyers at Zeigler Law Group, LLC Help Clients Mitigate Tax Consequences During Divorce

Divorce can have long-lasting and costly tax implications. Our experienced Toms River divorce taxation lawyers at Zeigler Law Group, LLC can provide the proper guidance and advice to protect what you have worked hard for and mitigate tax consequences. Call 732-361-4827 or contact us online to schedule a free consultation. Located in Toms River, Toms River, Princeton, and Mount Laurel, New Jersey, we serve clients in Ocean County, Monmouth County, Mercer County, and Burlington County.

Contact Zeigler Law Group, LLC
Today To Get Started

Sonya K, Zeigler, Esq. and her team have a well-earned reputation for committed and fierce legal representation. Our firm is here to provide you with the best possible guidance. Call Zeigler Law Group, LLC, at 732-361-4827 or contact us online to schedule a free consultation. Located in Tom’s River, Red Bank, Princeton, and Mount Laurel, New Jersey, we serve clients throughout the surrounding areas.

This field is for validation purposes and should be left unchanged.