Both your feelings and finances can be affected by divorce. People often do not consider taxes when talking about custody and dividing assets. Nonetheless, if you’re experiencing divorce in Hampton, you should learn how it might affect your taxes. That’s why getting a professional Hampton accountant is important.
1. When Many Materials
Your marital situation on December 31 decides how you will file your taxes for that year. In the event your divorce ends by your filing date, you’ll do your taxes as “Single” or “Head of Household,” which comes with more tax savings if you have dependents. Accountants in Hampton are equipped to help you decide on the filing status that reduces the tax amount you need to pay.
2. Both Child Custody and Tax Benefits
Generally, it’s the custodial parent who gets to write the child as a dependent, but you can set this differently in your divorce contract. Consequently, it can change your access to the Child Tax Credit, Earned Income Tax Credit and Dependent Care Credit. A good accountant can help prevent you from not claiming what you can and breaking IRS rules.
3. The difference between alimony and child support.
Alimony payments made to divorced partners prior to 2019 were useful for a deduction by the one paying and regarded as taxable income by the recipient. Divorces that took place after 2018 do away with the alimony deduction and recipients don’t need to consider it taxable income. When you pay child support, it’s never taken into account for tax purposes. Confused? To ensure their clients comply with regulations, accountants at Hampton handle all of these important details.
4. Moving Assets and Capital Gains
Dividing homes, savings for the retired or stocks for dividing during divorce? Taxes don’t apply to property transfers that happen between divorcing spouses. But when you eventually sell your property, there could be capital gains taxes to pay. A local accountant in Hampton can recommend how to separate your assets to ensure that you do not face tax surprises later.
5. Hidden Tax Traps
Legal fees, retirement account rollovers, and the Affordable Care Act's shared responsibility rules can all create unexpected tax issues. Divorce often has ripple effects for years — and tax planning is crucial to protect your financial future.
Whether you're newly separated or deep in the divorce process, partnering with knowledgeable Hampton accountants ensures your finances remain intact. For trusted, confidential advice tailored to your unique situation, reach out to accountants Hampton who understand both IRS rules and local financial dynamics.
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