Jamie Graham & Associates, PLLC

Taxes can blindside people following divorce

Divorce naturally can be costly in Texas due to court costs, alimony and child support, for example. These expenses are generally expected as part of the divorce process. However, some divorce-related costs are not quite as apparent, including taxes.

First, a person's tax-filing status will change following divorce. Property division may also have a huge effect on a person in the area of taxes. Furthermore, capital gains taxes might come into play after a divorce settlement, showing up in several places, such as investments and real estate transactions.

When a martial home is sold as part of a divorce proceeding, the sale of this principal residence might not be taxed depending on the amount of gain. This is because a cap gain fee exists for individuals and couples. However, a person who withdraws funds from a retirement account/fund, such as a pension, IRA or 401k, might end up being taxed the full rate.

Going through divorce can be both financially and emotionally draining, and unfortunately, poor decisions made during the divorce proceeding can have negative consequences in the long term. An applied understanding of the law may help people going through divorce in Texas to fight for their fair share of assets and pursue their best interests when dealing with matters such as property division. If both parties are able to tackle these issues through divorce negotiation or mediation, they may be able to avoid further court intrusion. Otherwise, a judge will have to make these important decisions for them, and the outcome may not be personally favorable to either or both parties.

Source: goodmenproject.com, "How Not to Get Financially Blindsided By Divorce", Zephyr Hill, July 12, 2016

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At Jamie Graham & Associates, PLLC, we have received a variety of honors and awards for our family law services. Members of our team have been listed as Top Lawyers in San Antonio Scene magazine. We take pride in the number of positive reviews we have received from satisfied clients. On AVVO, a lawyer rating website, we have received an 8.9 rating overall and many positive ratings from clients and colleagues.

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