Divorce is a complex process of dividing assets. Whether you reside in Connecticut or elsewhere, the problem with dividing certain assets is the income tax issues that are likely to follow if they are not divided the right way. A tax attorney may be able to assist you in decreasing your tax burden by helping you properly structure your divorce settlement.
What are some of the most commonly seen tax issues noted in divorce? First, there is the marital home. If the property is sold, one or both parties will have to make the tax payment on the sale.
Second, there is the dividing of retirement accounts. Funds must be transferred in a certain way in order to avoid early distribution taxes. Third, there is the alimony issue. While new tax laws will eliminate alimony taxes starting in 2019, those individuals who are on the receiving end of an alimony order and who finalize their divorces before the year’s end will have to make tax payments on alimony income.
The list of potential tax problems that can affect Connecticut residents going through the divorce process can go on and on. Divorce is stressful and expensive enough without having to worry about having to pay a massive tax bill when all is said and done. While it may not be possible to avoid certain taxes, minimizing your tax obligation. is achievable. An experienced tax attorney is a great resource to have when going through the divorce process. To learn more about income tax issues related to divorce and how a tax attorney can help you address them, please take a moment and visit our firm’s website.