Articles
Your Divorce and Taxes
by Tyler P. A Passionate Blogger - EntertainmentA recurring event all working people have to deal with is taxes. One well known statement by Benjamin Franklin is on the certainty of death and taxes. And this is the same when it comes to divorce; taxes affect aspects of the divorce process. This article will discuss taxes associated with divorce.
Firstly, it is important to figure out taxes that are linked with divorce legal fees. In itself, it is complicated to figure out these taxes; as such it may be wise to hire a accountant to assist in figuring these taxes out and determining what is deductible and what is not. That being said, generally, legal expenses cannot be deducted. However, there are instances whereby you can deduct them. Such legal fees that are deductible are often associated with:
· getting child support,
· when there is an increase in the amount of child support being received,
· to enforce a child support order that already exists
· when getting spousal support, or
· resisting the paying spouse’s attempt to reduce child or spousal support
It is likely you may wonder when you file your taxes if what you pay for child support is tax deductible. The basic answer is that payments made in respect of child support are not deductible. There is an exception, though, that exists. Child support orders that came into effect prior to May 1, 1997, are tax deductible.
Another tax question is with regards to the spouse paying spousal support. It must be noted that the spouse that is paying spousal support can deduct such support payments from their taxes if the support is being paid periodically and in accordance with a written and signed separation agreement. In the same way, the spouse that receives spousal support payments must pay taxes on the money received.
With regards to receiving child tax benefits, the person that is primarily responsible for caring and bring up a child is eligible to make a claim for Canada Child Tax Benefit. In instances where there is shared custody between parents, each parent is generally eligible to receive the child tax benefit for six months of the year.
A key element of tax comes into play in respect of the division of the marital property. It must be noted that an “equalization payment” has no effect on one’s taxes in the majority of cases. That being said, when it comes to the transfer of property between spouses in order to settle the division of property there are tax implications. Further, this needs to be taken into consideration when determining how the property is going to be divided. There are basically two choices one can make, either incur a tax on capital gains immediately or defer the tax. In addition, the spouses’ separation agreement should be drafted in a way that ensures that there is no income attribution between the spouses.
One article provided advice with regards to not paying unnecessary taxes during the divorce process. It stated that if the home is transferred to just one spouse, it is important to list the home as the principal residence. In addition, the article advises that spouses take full advantage of the Canada Child Tax Benefit. For legal advice contact a family lawyer in Brampton today.
Resource Box: For the best family lawyer in Markham, the author recommends Divorce Go.
Firstly, it is important to figure out taxes that are linked with divorce legal fees. In itself, it is complicated to figure out these taxes; as such it may be wise to hire a accountant to assist in figuring these taxes out and determining what is deductible and what is not. That being said, generally, legal expenses cannot be deducted. However, there are instances whereby you can deduct them. Such legal fees that are deductible are often associated with:
· getting child support,
· when there is an increase in the amount of child support being received,
· to enforce a child support order that already exists
· when getting spousal support, or
· resisting the paying spouse’s attempt to reduce child or spousal support
It is likely you may wonder when you file your taxes if what you pay for child support is tax deductible. The basic answer is that payments made in respect of child support are not deductible. There is an exception, though, that exists. Child support orders that came into effect prior to May 1, 1997, are tax deductible.
Another tax question is with regards to the spouse paying spousal support. It must be noted that the spouse that is paying spousal support can deduct such support payments from their taxes if the support is being paid periodically and in accordance with a written and signed separation agreement. In the same way, the spouse that receives spousal support payments must pay taxes on the money received.
With regards to receiving child tax benefits, the person that is primarily responsible for caring and bring up a child is eligible to make a claim for Canada Child Tax Benefit. In instances where there is shared custody between parents, each parent is generally eligible to receive the child tax benefit for six months of the year.
A key element of tax comes into play in respect of the division of the marital property. It must be noted that an “equalization payment” has no effect on one’s taxes in the majority of cases. That being said, when it comes to the transfer of property between spouses in order to settle the division of property there are tax implications. Further, this needs to be taken into consideration when determining how the property is going to be divided. There are basically two choices one can make, either incur a tax on capital gains immediately or defer the tax. In addition, the spouses’ separation agreement should be drafted in a way that ensures that there is no income attribution between the spouses.
One article provided advice with regards to not paying unnecessary taxes during the divorce process. It stated that if the home is transferred to just one spouse, it is important to list the home as the principal residence. In addition, the article advises that spouses take full advantage of the Canada Child Tax Benefit. For legal advice contact a family lawyer in Brampton today.
Resource Box: For the best family lawyer in Markham, the author recommends Divorce Go.
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About Tyler P. 
A Passionate Blogger - Entertainment
5 connections, 0 recommendations, 95 honor points.Joined APSense since, July 30th, 2016, From IKEJA, South Africa.
Created on Oct 21st 2020 01:43. Viewed 173 times.
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