It is tax season again which makes us think about all the tax issues that we raise in divorce mediation. In divorce mediation, we guide divorcing couples through child support, spousal support and division of assets, and tax issues arise during all of these discussions. At Westfield Mediation, LLC, we always advise our clients to speak with their accountants during the divorce process to make sure that the clients understand the tax benefits and obligations in their agreements.
First, we explain that spousal support or alimony counts as income to the recipient, and is deductible by the payor. It is important to know this so that if you receive alimony, you are prepared to meet your tax obligations when they come due. It may also factor into your decision about whether or not to opt for alimony or instead select a greater share of the marital assets or a smaller share of the marital debts.
Taxes are also a concern in child support. The amount of child support may vary depending on which parent is claiming the children as dependents. Sometimes, parents alternate which one will be able to claim this deduction, and sometimes if they have multiple children, they divide the dependents between them.
Finally, the topic of taxes arises in the division of assets and liabilities. Some assets are taxable while others like retirement accounts are tax–deferred. In addition, if one party keeps the marital home, he or she may also get the tax benefits of home ownership. Sale of the marital home may lead to taxable income depending on how long they have owned the residence and how much money they earn from the sale.
In divorce mediation, we help couples ask and answer important financial questions. This way, they know that the agreement will work for them going forward.
For more information about Divorce Mediation, please call Randi M. Albert, JD or Michelle Weinberg, LMFT at Westfield Mediation, LLC at 908-913-0373 or email us at info@westfieldnjmediation.com. You can also visit our website www.westfieldnjmediation.com
First, we explain that spousal support or alimony counts as income to the recipient, and is deductible by the payor. It is important to know this so that if you receive alimony, you are prepared to meet your tax obligations when they come due. It may also factor into your decision about whether or not to opt for alimony or instead select a greater share of the marital assets or a smaller share of the marital debts.
Taxes are also a concern in child support. The amount of child support may vary depending on which parent is claiming the children as dependents. Sometimes, parents alternate which one will be able to claim this deduction, and sometimes if they have multiple children, they divide the dependents between them.
Finally, the topic of taxes arises in the division of assets and liabilities. Some assets are taxable while others like retirement accounts are tax–deferred. In addition, if one party keeps the marital home, he or she may also get the tax benefits of home ownership. Sale of the marital home may lead to taxable income depending on how long they have owned the residence and how much money they earn from the sale.
In divorce mediation, we help couples ask and answer important financial questions. This way, they know that the agreement will work for them going forward.
For more information about Divorce Mediation, please call Randi M. Albert, JD or Michelle Weinberg, LMFT at Westfield Mediation, LLC at 908-913-0373 or email us at info@westfieldnjmediation.com. You can also visit our website www.westfieldnjmediation.com
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