Many individuals in New Jersey already know that a divorce can be expensive. One spouse taking over assets that previously belonged to the other as part of a divorce agreement will not typically result in additional tax payments. However, restructuring these assets in a way that creates a positive cash flow will. The good news for separating spouses is that a few ways are available to them to minimize the tax consequences that result from the divorce.
One suggestion a party to a high-asset divorce may find beneficial is to understand the cash implications for both now and the future when dividing assets. Many times, divorcees are only concerned with the overall value of the asset and unwittingly expose themselves to tax exposure that they could otherwise avoid.
A second tip that may save divorcees money in tax season is to take advantage of every tax credit available to them. Parties to a divorce who accept the responsibility as custodial parents will benefit especially from this. The reason is that many tax credits are associated with caring for children.
Finally, individuals should avoid becoming one of the many divorcees who forget the tax benefits that can come from their marriage. One way to make sure this does not happen is to include a tax refund as part of the divorce settlement if the couple is expecting one. It is also possible to benefit from the losses in previous years resulting from businesses or investments owned by the couple.
The divorce process is never easy for anyone involved. It is important, however, that divorcees possess the resources necessary to move forward with their lives once the divorce process is completed. An experienced family law attorney may represent an individual involved in a divorce to help ensure a favorable outcome.