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Oklahoma Divorce and Tax Attorneys and Laws

The issue of divorce and taxes is a very complicated one, being that not everyone is adept with the skill of balancing and keeping track of finances. Generally, running numbers is something that one party in the marriage takes on in terms of managing the budget, setting up retirement savings and filing taxes. Unfortunately, when a divorce begins, finances are often one of the worst and most intense battles that follows.

The best way to handle a situation involving divorce and taxes is to hire a lawyer that will do their best to provide a more comfortable living situation. Many issues have to be addressed such as exemptions, write-off’s, who is head of the household and other applicable issues.

Privett Law is an Oklahoma law firm that’s here to handle your messy tax situation that surrounds your divorce. Here at Privett Law we can make your life a little bit easier by helping you straighten out your tax situation. Contact us now for a full consultation regarding your divorce and the tax issues that remain.

Divorce and Tax Issues to Be Addressed

Tax consequences are a necessary result of every decision or solution that’s found within a divorce proceeding, settlement agreement, or marital dispute resolution, and these tax consequences can last for many years. Regardless of the type of family law situation you face, tax questions are going to be part of your analysis so that you’re not taken by surprise a few months down the road. Below are 20 central issues to consider:

Joint Return, Separate Returns, or No Return?

As difficult as it will be to remain civil, this is a critical decision to make. The parties need to put their feelings aside and move forward with the understanding that the decision that’s made must be best for both parties, and it must be made before the government makes it for you and most likely with greater costs associated with it.

The Doctrine of Tacit Consent

The judicial doctrine of Tacit Consent makes the legal assumption that the presence or absence of a spouse's signature is not determinative of whether a valid joint return was filed.

Innocent Spouse Relief

Thankfully, the federal legislature has buffered some degree of protection for uninvolved spouses when filing a joint return that will allow some spouses not to become embroiled in the problems that the filing spouse incurred. This relief applies to married, separated and even divorced spouses who file a joint return.

Requirements for Filing as Head of Household

The IRS uses a “household maintenance test” and a “marital filing status test” in order to determine whether an individual has earned the right to file his or her tax return using this status.

Dependents Questions

According to the Internal Revenue Code, dependency status must involve the presence of two components: 1) those individuals defined as dependents, and 2) the right to claim the dependency exemption for those individuals.

Unique Regulations for Divorced or Separated Individuals

The Internal Revenue Code has several sections within it that will define a situation as being considered divorced as well as an entire set of rules that deal with divorce and taxes. Contact Privett Law to learn more about these regulations.

Dependents’ Support Requirements

When an individual does not qualify under the special rules for divorce or separated individuals, the general support tests apply. Generally, one must provide more than half the support of an individual to meet one of the tests for dependency.

Children and the Resulting Tax Treatment

If you are not sure as to whether the tax code would consider you a “custodial” parent or whether you should claim your child as an exemption, contact Atkins & Markoff today to ask all of your questions pertaining to divorce and taxes.

Tax Considerations for Adopted/Foster Children

You need to understand the sometimes-unique attributes that pertain to children who are either adopted or foster children, as these can be complicated issues when combining them with the issues of divorce and taxes.

Divorce-Driven Property Transfers

Generally speaking, property transfers between spouses who are ending their marriage can come with certain tax advantages. However, there are limitations to these advantages depending on the value of the property transferred.

Transfers of Individual Retirement Accounts

If cash is withdrawn from an IRA as a result of a divorce, it will generally be considered a “taxable event” in regards to whoever receives the proceeds of this liquidation.

Issues of Compounding Interest

The rules for deductibility of interest from taxable income are the same as they would have been before the divorce in general.

Alimony/Spousal Support

Payments made for spousal support are generally tax deductible for the person making the payments. Any amounts paid that qualify as spousal support will be classified as such unless it’s unclear whether or not certain amounts within these payments are meant for other uses, such as child support or property transfer. See Privett Law today to get answers to these divorce and taxes questions.

Life Insurance and Divorce

There are situations, depending on structure, where life insurance premiums can be classified as spousal support in regards to tax returns and taxable income.

Residence Payments as Spousal SupporT

Whether or not you’ll be able to deduct the interest portions of your mortgage or your real estate taxes will depend on several factors, and you can gain an understanding of these factors by consulting with Privett Law today.

Marital Obligations and Debts as Spousal Support

If a spouse makes payments on a debt that was incurred by the other spouse, and these payments were made in accordance with the divorce and separation agreement, then it’s possible for these payments to be treated as spousal support for divorce and taxes purposes.

Qualified Domestic Relations Orders

Within divorce and taxes issues is the permission of accrued pension benefits to be taken into account in divorce settlements.

Tax-Adjusted Balance Sheet for Property Division

The tax-adjusted balance sheet is a schedule of the after-tax values of marital assets and liabilities. Basically, these assets and liabilities of the marriage are treated as if they were liquidated and the remaining cash were distributed.

Taxes and Valuations of Business

When an asset appreciates in value, the owner and beneficiary of that appreciation will be liable for taxes when that asset is sold or liquidated. This forthcoming tax liability needs to be considered when working towards the sale of a business pursuant to a divorce.

Should You Hire a Lawyer?

As you’ve seen the concept and questions that surround divorce and taxes in Oklahoma is extremely complicated. One mistake can cost the mistaken party thousands of dollars, and when someone is going through a divorce, the last thing that he or she should do is make highly-technical financial decisions. That’s why you need to contact Privett Law today to schedule a consultation regarding your divorce and taxes that will result from this unfortunate consequence. Do so today in order to begin the process of gaining control of your financial life.