How Can Divorcees Avoid Tax Problems?

A divorce can be a long, drawn-out process that requires legal and personal settlement from both parties. After a marriage has ended, other concerns must be taken into account such as the filing of taxes. To avoid an IRS audit, divorcees must take the time to look into this aspect.

Image source: Theguardian.com

Some legal counselors suggest that couples filing for divorce must take into account child support claims, the splitting of assets, and payment of liabilities. The help of a divorce mediator or a legal counselor may be needed especially if the couple could no longer see eye-to-eye. In these settlements, the benefits and the payments should be made fair and square as much as possible.

After the change of status, an individual must be ready with supporting documents that prove the marriage’s dissolution. Having a copy of the divorce decree might make matters easier. However, considering the person as single or married depends on the time when the divorce was finalized. For example, if a divorce settlement has been finalized on December of the current year, the divorcee is now considered single for the succeeding months. The individual may now file as an individual or as head of household.

 Image source: Divorce.lovetoknow.com

If a divorce is still being processed, the two parties may still need to file as a married person filing jointly or as a married person filing separately. As long as the decree hasn’t been released, the law considers these two individuals to be still married. At this point, it is also necessary to settle the taxability of alimony, child support, property and retirement transfers. The help of reliable tax lawyers is necessary to iron these details out.

It is safe to cover all bases with regards to taxes to avoid tax problems after a divorce. This is also to ensure that the two parties will be free from unnecessary obligations to the other after the split.

Approaching all tax-related dealings with faith-based philosophy, honesty, and integrity, Tax Tiger has been standing up for clients with IRS issues since 2002. It is a member of the National Association of Tax Resolution Companies and is a trusted name in the industry. Learn more about the company through its official website.

Innocent Spouse Relief: An Introduction

What is innocent spouse relief? According to federal law, when joint income tax return is filed by both the husband and wife, both spouses are responsible for the taxes stated. But what if there has been an error in the filing? Will both parties be charged with penalties? 

Under the current tax code, a spouse can be released from direct financial liability, as approved by the IRS. This freedom from responsibility from having to pay tax debts of the other (or estranged) spouse is the innocent spouse relief. However, filing for innocent spouse relief can be tedious and time-consuming. Filing for it is not an assurance that the spouse can be relieved from the responsibility. 

How does a spouse file for the relief of tax responsibility of the other spouse? The IRS will evaluate the applying spouse’s work experience, relationship status, disabilities, the level of involvement in the house, and finances. This evaluation will determine if the spouse can qualify for the relief.

Image source: todaygh.com

A taxpayer seeking innocent spouse relief must meet all of these conditions: The understatement of tax is the error of the other spouse. The filing party has no idea when the return was signed. It is unfair for the filing party to be held liable for the tax debt. 

The income tax return is a federal, legal document. This is still important, especially with divorcing parties. When the IRS discovers errors in income tax returns, both spouses will be responsible for paying unpaid taxes and penalties regardless of who made the error. This is the reason, if a party is wrongly charged, it is important to file for innocent spouse relief.

Image source: victoryfg.com.hk

 

Tax Tiger offers high-quality tax resolution services to protect its hardworking clients. Visit its official website to learn more about its solutions.