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Tax challenges and divorce in New Jersey  

On Behalf of | Feb 3, 2022 | Divorce

When you file your taxes, the tax year goes from January 1 through December 31 of the previous year. Thus, the timing of your divorce may have an impact on exactly how much you have to pay (or how much you get back).

If you divorce later in the year, your tax status (and thus how much money your employer withheld while you were still married) will be different once you are divorced and change your tax status. For the portion of the year in which you are no longer filing a joint return, you will most likely owe more money to the government. One way to make this situation better is to get divorced at the very beginning of the year (or if you were going to divorce in December, wait until January of the next year).Change your tax status starting the next year and then file accordingly at the end of that year.

Tax credit for children in a divorce

If both parents meet the IRS’ criteria it is common for a divorced couple to share who gets to claim the child or children on their taxes. If there is one child, the parents can alternate each year. If there are two children, each parent can claim one until each child is no longer of an age for the parents to claim them on their taxes. At that point, they can go back to alternating the remaining child.

Taxes and equitable distribution

The way that the assets are divided in a divorce will also directly affect taxes and it is important that each person receive assets that are worth around the same amount so that the taxes are similar. If you are in such a situation, it may be wise to consult a knowledgeable family lawyer who can guide you in all aspects of family law, including having a strategy to ensure that you approach your tax situation in the most sensible, fairest way possible for everyone.