Baltimore County Family Lawyer Discuses Divorce and Tax Consequences
The entertainment world has been filled with news related to celebrity divorces and general turmoil in recent months. One of the latest celebrity couples to finalize their divorce is actress Amber Heard and actor Johnny Depp. After only 15 months of marriage, the couple has decided to call it quits, with Heard ultimately seeking a temporary restraining order against Depp after claiming that he was physically and verbally abusive to her during the marriage.
Heard was seeking monthly alimony; however, the parting couple reached a settlement whereby Depp will make a one-time payment of $7 million to Heard. What caught the attention of many news outlets was that Heard intends to give the entire amount of the settlement to charity, with half of it going to the Children’s Hospital of Los Angeles and the other half going to the American Civil Liberties Union (specifically to help prevent violence against women).
Beyond Heard’s generosity, the latest talk related to the situation concerns the potential tax ramifications, depending on how the settlement payment was structured. Which brings us to a brief, basic discussion about taxes as they relate to divorce -- particularly for divorcing couples who have children.
A Look at Exemptions for Dependents
Your Towson divorce lawyer knows that in divorces, those who have children might reach an agreement with respect to who will get to claim which child or children. If the parting couple cannot reach an agreement on their own, the court might decide for them. It is important for the parties to note, however, that dependency exemption arguments/cases can be quite complicated and accordingly, they should be handled by skilled divorce attorneys.
On occasion, dependency exemptions might be used to benefit both parents in divorce settlements. In general, a divorce settlement will specifically note who will be entitled to claim which child or children, and it will also discuss a number of other conditions. At present, the IRS says that the exemption is given to the custodial parent, unless he or she signs a release. If a release has been signed, it must be included with the non-custodial parent’s tax return for the relevant year in which the exemption is being claimed.
The Final Tax Return and Your Filing Status
Typically, non-custodial parents will be classified as “single,” while custodial parents can be “head of household” (unless they have remarried). If there is more than one child, it may be beneficial for those parents who share custody to be deemed the custodial parent of one of the children, which would allow for both parents to potentially qualify for “head of household” status for tax purposes.
With respect to the final return, it is important for individuals to note that their marital status is determined as of their standing on December 31st of the relevant year. Simply put, if you are still married on December 31st, then you may decide between filing a joint tax return or “married filing separately.” However, if you are divorced by December 31st, the options change to either single or head of household (if you are not remarried).
As you can see, the tax issues stemming from divorce can be tricky and complex. That said, it is important for those seeking a divorce to speak with a legal and/or tax professional to ensure that all laws and requirements are being properly followed. If you have questions about your divorce, contact the Law Offices of Amar Weisman, LLC today.
Call (410) 321-4994 For a Free Consultation
Call The Law Offices of Amar S. Weisman at (410) 321-4994 to schedule a Free Consultation. The Purpose of the consultation is to determine whether you want to retain this law firm as your Baltimore County & Harford County Family Lawyer. If you do wish to proceed, then you must pay a retainer. See Our Policy on Fees and Costs. The family firm is located next to The Circuit Court for Baltimore County, at 1018 Dulaney Valley Road, Towson, MD 21204.
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