If you are going through a divorce in California, you probably have many questions, some of them concerning your taxes. Your family law attorney and your accountant can help you understand the financial path ahead of you. Here are answers to seven of the most common tax questions asked by men and women going through a divorce in the greater Los Angeles area.
1. Is the spousal support I receive taxable? Generally speaking, yes, any spousal support received is considered taxable income. The paying spouse, however, can deduct those payments on their tax returns.
2. Is child support taxable? Child support comes out of post-tax dollars and is neither tax deductible nor tax includable.
3. Can I claim my child as a dependent? While existing federal and California law allows the custodial parent (the parent who has either sole physical custody of the child or the parent with whom the child resides for a majority of the time) to claim the dependency exemption for all children on their income tax returns, you and your ex-spouse can come to an agreement about which parent takes the dependency exemption.
4. Do I have to keep track of all child support and spousal support payments received or given? Yes. By keeping a detailed record, including the date and amount of each payment, you may be able to avoid potential disputes with your ex down the road.
5. Do I file an individual tax return? Generally speaking, you can file an individual tax return if your divorce is not final by the end of the year. Consult with your family lawyers about the best option for you.
6. Are my attorneys fees deductible? In certain cases, the answer is yes. Speak to your financial advisor or divorce attorney about the specifics on deducting some attorney and/or accountant fees for both states and federal income tax purposes.
7. What if my ex files an inaccurate joint tax return without my knowledge? Thankfully, if this happens to you, there are laws in place that protect you, the “innocent spouse”.
For detailed information on your specific tax questions during a California divorce, and additional insights relating to finances and taxes and your divorce, contact the expert Los Angeles family lawyers at LaurentLegal today. Our offices are located in Encino, and we serve Los Angeles, Beverly Hills, Calabasas, Malibu, and all areas within Los Angeles County.