TAX LIABILITY
Taxes are a huge subject of debate in divorce actions.
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Who is going to be responsible for paying taxes on this year's income?
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Who is going to claim the children as exemptions on this year's taxes?
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Should the parties file jointly or separately (assuming they are still
technically married on December 31st)?
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What will happen to the refund on last year's or this year's return?
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Who will be responsible for preparing this year's tax return?
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Will maintenance be taxable to the recipient and deductible to the
paying party?
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Will one party indemnify the other from liability on state, federal and
local taxes? (Particularly important if there is a business enterprise
involved.)
These are only a few of the questions you need to review with your attorney
during the divorce process.
If you have a complex financial estate, you would probably be well advised to
also consult with your Certified Public Accountant or a tax attorney.
The Internal Revenue Service has a great
deal of information and material available on the subject of divorce and taxes.
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