Protecting Your Family's Future
 

Tax Tips for Divorcing Couples

In the midst of a divorce, one of the last things you may think about are the potential tax ramifications of ending your marriage, but financial counselors say it’s something you need to address.

Child Support and Alimony Payments

It’s important to understand the tax consequences of both child support and alimony payments. Child support payments are taxable by the recipient. Furthermore, they cannot be claimed as a deduction by anyone paying child support.

Alimony payments are treated differently under state and federal tax laws. As a general rule, alimony is considered income and must be reported as such, provided the payments are made pursuant to a valid divorce or separation agreement, and the payments are made in cash (not in kind). Likewise, if the same conditions are met, alimony payments may be deducted by the payer.

Filing Status

If you are in the middle of a divorce at the end of the tax year, you can choose to file a joint return, or file as “married filing separately.” If your divorce becomes final before the end of the tax year, you must file as either single or as “head of household.”

To claim your children as exemptions on your return, you must be considered the custodial parent. Generally, the parent with whom the child spent the most amount of time will be considered the custodial parent for tax purposes. You can, however, claim your child if the custodial parent waives the exemption in writing.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

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The Benefits of Preparing for Divorce

Though divorce is always emotionally difficult, you can minimize some of the financial, personal and time challenges by thoroughly preparing for the process, once it’s clear that divorce is inevitable. Here are some of the things you can do.

Protect Yourself Financially

Whether you are the sole breadwinner, a stay-at-home-parent or one of two working parents, a divorce will have a significant impact. You may face the significant loss of income, be required to pay substantial amounts in child or spousal support, or wind up with a big chunk of the marital debt.  To minimize the impact, put together a file that contains all of the following:

  • Pay stubs for the last two years
  • Bank statements for the last two years
  • Current investment and retirement account statements
  • Documentation of any life insurance policies
  • Copies of tax returns for the last five years
  • A copy of your credit report

Protect Your Right to See Your Children

Custody is never an easy matter to resolve. You want what’s best for your children, but you also want to play an active role in your child’s life. All states use the standard of the “best interests of the child” when determining who will have custody. If you believe that custody may be an issue, you need to do the following:

  • Identify what you believe will be in the best interests of your children and why
  • Document anything about your ex that you believe may put your children at risk. Remember, though, that this is not about disparaging your ex—it’s about protecting your children. Don’t exaggerate isolated incidents in an attempt to gain favor with the courts. You’ll only hurt  your children in the process

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

Landing On Your Feet after Divorce

When you are going through a divorce, it can be difficult to believe that life will return to normal again. It will go on, but it won’t ever be the same. There are specific steps you want to take to make certain that you are moving forward, so that the past won’t keep catching up to you.

Get a New Bank Account

This is actually a good idea as soon as you know you are going to file for or be a defendant in a divorce proceeding. You want to start putting your money into your own account, so that your ex doesn’t have unlimited access to it. You should also close any joint accounts you had with your ex.

Replace Your Credit Cards

Terminate any joint credit cards immediately. It may also be time to think about whether or not you want to open new cards. Divorce can be an emotional time—if you are prone to spending money in response to emotional trauma, you might be better served not opening a new credit card. Furthermore, because you won’t have financial stability for a little while, you may want to operate primarily on a cash basis for a while.

Change Your Beneficiaries

If your ex is named as a beneficiary on a life insurance policy, IRA, retirement plan or in a will, you need to modify that. With respect to insurance, you may want to obtain a life insurance policy on your ex (owned by your ex) to cover alimony or child support in the event of his or her premature death.

Notify the Government When Necessary

The IRS and the Social Security Administration should be notified of your divorce.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas.

To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

Texas Divorce Laws — An Overview

Divorce in Texas—An Overview

Before you think seriously about getting a divorce in Texas, it’s a good idea to learn as much about the process as you can. Here’s an overview of divorce in Texas.

Qualifying to File in Texas

Like most states, Texas requires that you have a minimum period of residency in the state before you can file for divorce. At least one of the parties to a divorce action in Texas must have lived in the state for the six month period immediately preceding the filing. This applies to military personnel as well. As a soldier, you need not have been a resident of Texas before being stationed there, but you must have served at one of the state’s military installations for a minimum of six months before the divorce action is filed.

In addition, at least one of the parties to the divorce must have resided in the county where the divorce is filed for at least 90 days immediately prior to the filing of the complaint.

Grounds for Filing

Although you don’t need to state grounds for filing—Texas allows no-fault divorce—doing so can gain you some advantage in property distribution and alimony determinations. Texas allows a party to file an at-fault-based divorce complaint for the following reasons:

  • The other spouse committed adultery
  • The other spouse engaged in physical or mental cruelty
  • The other spouse was convicted of a felony, has served at least one year in the penitentiary in Texas or another state, and has not been pardoned.
  • The other spouse is confined to a mental hospital for at least three years
  • The other spouse has abandoned the marriage or the marital partner

Alimony or Spousal Support

A Texas court has the discretion to award spousal support on a limited basis. The court may grant temporary or permanent alimony, based on a number of factors, including the length of the marriage, the age and health of the parties, the earning capacity of the parties, and any evidence of domestic violence or abuse.

Child Custody, Visitation and Support

In Texas, decisions that affect minor children must give priority to the best interests of the child. Child support is generally calculated using a state formula, but the court may amend the amount to be paid, based on the needs of the child and the ability of the parents to provide. Texas courts encourage agreements that allow minor children to have regular and meaningful contact with both parents. The parties may agree to the terms of custody and visitation, but the court may impose different conditions if they believe doing so is in the best interests of the child.

Contact Us

At the office of Linda Stewart Law, PLLC, in Baytown, we bring more than 8 years of experience to clients in south Texas. To learn how we can help, call our office at 281-420-8020 or contact us online. We offer an initial consultation at a reduced fee of $50. We accept credit cards and will set up a payment plan, if appropriate. Our offices are open Monday through Thursday, from 9 a.m. until 5 p.m., and until noon on Fridays. Evening and weekend appointments can be arranged upon request.

Se Habla Espanol | ASL and ESL Services Also Available

Your Status Update Could Come Back to Haunt You

Two years ago, the American Academy of Matrimonial Lawyers (AAML) reported that one in five divorces used evidence from Facebook and other social networking sites like Myspace and Twitter. In February 2013, the AAML reported a newly popular source of evidence in divorce cases – dating sites like Match.com and Plenty of Fish.

One would think the lesson would be obvious. If you are married or in the middle of a divorce, stay off the online dating sites. Be cautious – and truthful – with your social media comments and status updates. Apparently, though, these are not obvious lessons to four out of five divorcing spouses.

How could social media be used in divorce cases? Here are some examples:

  • Your online dating profile says you have no children and want none. Your spouse uses it as evidence in your child custody fight.
  • The vast majority of Facebook photos tagged with your name show you at a party with a drink in hand. Your spouse uses it as evidence in her argument for limited parenting time.
  • You say you have limited income and are unable to pay spousal support but post a photo or video of your new sports car.
  • A friend tags a photo of you being intimate with a new girlfriend or boyfriend, but you dispute allegations of infidelity.
  • You claim business trips or medical appointments as reasons you are unavailable for visitation with your children, but your social media posts reveal that you were in fact on vacation or in town and not at a medical appointment.
  • You update your LinkedIn status with new employment information but claim continuing unemployment as a reason you are unable to pay child support.
  • You claim you have no problems with anger management but post frequent status updates threatening physical violence.

The Privacy Rights Clearinghouse publishes an online fact sheet regarding privacy concerns when using social media – Social Networking Privacy: How to be Safe, Secure and Social.

Stewart Law, PLLC, located in Baytown, Texas, is well-versed in obtaining and countering social media evidence in divorce cases. We have provided legal counsel to men and women in divorce and family law matters for 8 years. For an initial assessment and consultation of your case, contact us online or call our office at (281) 420-8020, at a reduced fee of $50.

 
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