Ready to File for Divorce in Florida? Female Divorce Lawyer, Jordan Gerber, Esq., Discusses the Impact of Taxes
When a cheap divorce in Florida is the main goal, parties often overlook the possibility of any negative implications. Female divorce lawyer, Jordan Gerber, Esq., reveals what Florida family forms don’t.
Why the Federal Government Cares about Florida Family Forms and Your Divorce
Word association… ready go! Bowie. The Stones. That foolish yet charming smoosh from ‘My Father, the hero’. If your guess is rock stars and a random pseudo-celebrity that are all tax exiles, good work. You can now have the honor of advertising yourself as an amazing addition to any trivia team. You’re welcome.
Since we’re on the subject of taxes, it’s only logical to highlight legal tax considerations associated with Florida divorce. Weak segue, I know, but cut me some slack. Every female divorce lawyer can’t be a literary genius all the time.
If Cheap Divorce in Florida is a Priority, Look Past Florida Family Forms and Check out irs.gov
Parties often think they’re ready to file for divorce on the public site without the assistance of an attorneys service. No legal help equals lower costs which amounts to a cheap divorce in Florida, right? The problem with speeding through this complex process is that the long term effects of this route are often not contemplated. After all, who wants to deal with a clerk file court administrator or some judicial site that charges a court fee? Like all legal documents, it’s important to pay close attention to the fine print of divorce forms when a parties marriage ends.
Take the tax impact of equitable distribution, for example. When a spouse transfers property, a gain or loss isn’t generally recognized. But only if the Florida family forms transfer of this property relates to a states divorce court distribution. However, the rule doesn’t always apply and the last thing anyone wants is the IRS to come to their door because of tax issues associated with the end of their marriage. Suddenly that cheap divorce in Florida ain’t looking so cheap.
Female Divorce Lawyer, Jordan Gerber, Esq., Explains the Role that Florida Family Forms Play in Your Divorce
If you think a speedy split is the only way to leave your ex faster than a female sorority member after a Big Ben sighting, pay close attention. A gain or loss isn’t recognized on a transfer of property from a spouse under Palm Beach County Florida family forms in certain circumstances:
- The transfer of property to the other spouse occurs before divorce.
- The transfer of property is to a former spouse. This is only if the transfer is incident to Palm Beach County divorce.
This rule applies even if the transfer was in exchange for cash, the release of marital rights, the assumption of liabilities, or other consideration. When the transfer relates to certain service law circumstances, it’s incident to Palm Beach County divorce:
- If the transfer occurs within 1 year after the date the marriage ends.
- If the transfer occurs due to the marriage ending.
A property transfer relates to Palm Beach County divorce under both of the following conditions:
- The transfer occurs via an original or modified divorce decree.
- The transfer occurs within 6 years after the date of the final judgment for Palm Beach County divorce.
Absent these conditions, the transfer isn’t presumed to relate to the end of a marriage. Regardless of what Florida family forms say. A spouse’s share of a recognized gain or loss of the sale of jointly owned property must be reported. If the property transfer is to a third party, it’s actually two separate transfers. Gains or losses are not recognized on the first transfer. Instead, the parties may have to recognize a gain or loss on the second transfer. In conclusion, focus on more than simply a cheap divorce in Florida if you don’t want the tax man to come back and bite you.
A Primer on Alimony and Taxes Beyond Florida Family Forms
Generally, a payor spouse can deduct alimony payments on his or her taxes. Consequently, a receiving spouse must claim these payments as part of his or her gross income. However, parties can agree to waive this rule in their Florida divorce papers. But be careful.
The deduction is valuable to the party forking over payments because it’s an adjustment to income. This is also known as an ‘above the line’ deduction. The party who pays alimony is usually in a higher tax bracket than the recipient. In this situation, structuring payments as alimony can generate significant tax savings. Remember, a cheap divorce in Florida isn’t the only way to save money.
Female Divorce Lawyer Explains what else Florida Family Forms Don’t Reveal about Alimony and Taxes
The IRS treats a payment as alimony only if:
- The payment is in cash.
- The money is received by or on behalf of a spouse.
- It must be in accordance with the terms of divorce papers or a separation agreement.
- The divorce papers or separation agreement can’t designate the payment as something other than alimony.
- Legally separated spouses can’t be members of the same household at the time of payment.
- There can’t be any obligation to make a payment if the receiving spouse dies.
- The payment can’t be for child support.
Best Female Divorce Lawyer Advice: Financial Planning beyond Family Forms is Necessary for a Cheap Divorce in Florida
The property received from a former spouse is treated as acquired by gift and, therefore, its value isn’t taxable. A spouses share of the recognized gain or loss is then reported on their tax return when a property is sold. If the sale of the marital home is outlined in the parties divorce papers, the seller can exclude up to 250k (500k if filing jointly) of the administration gain on the sale.
The last thing anyone wants to do is go back to the Palm Beach County courthouse due to a fixation on cheap divorce in Florida the first time around. If someone as bad ass as Blade or as unassuming as Martha Stewart can get locked up for criminal tax evasion, you best believe it can happen to you. Even though your ex may not be calling you sweet cheeks anymore, you certainly don’t want this guy to either. →
Don’t Let a Cheap Divorce in Florida Come Back to Haunt You
Many married taxpayers choose to file a joint tax return because the legal forms come with benefits. Of course, there is also a down side. Both taxpayers are jointly and individually responsible for the tax. This includes any interest or penalty due on the joint return. Even if you file for divorce. The worst part is you’re still on the hook even if your divorce papers say that one spouse will take on the debt. This is true even if the violating spouse was the only breadwinner.
Florida Family Law Forms Don’t Explain this Obstacle to Cheap Divorce in Florida
Innocent spouse status became easier to get after 1998. The changes to the law only require that the understatement of tax be attributable to an erroneous item of the other spouse. The law also includes two additional ways for a client to get relief. Separation of liability and equitable relief. This is when the taxpayer is divorced, separated, or no longer living with the spouse. One party requests relief through the separation of liability for an understatement of tax between the parties. If men or women don’t qualify for either, they still have a shot with equitable relief. As a result, the IRS cuts one party a break if it’s unfair to hold one party liable for tax that should only be paid by his or her good for nothing ex.
Keep in mind this only provides relief from a joint return. If an individual signed a joint return under duress, the signature isn’t valid. It basically means that a joint return wasn’t filed, despite what divorce papers say.
When You File for Divorce in Florida, the Innocent Spouse Election is Made through the IRS and Not Florida Family Forms
For a party to secure relief from liability for tax, interest and/or penalties several requirements must be met:
- There must be a joint return.
- There must be an understatement of tax attributable to erroneous items of the other spouse filing the return.
- The party seeking relief must prove that they didn’t know, and had no reason to know, that there was an understatement.
- IRS must find that it would be inequitable to hold the spouse liable for the deficiency.
- The party seeking relief elects innocent spouse status within 2 years after tax collection activities have begun.
A female divorce lawyer well versed in these tax considerations will ensure these tax breaks are made a part of the parties divorce papers.
Click Boca Raton Female Divorce Lawyer to schedule your consultation. Proudly Serving Boca Raton, Delray Beach, West Palm Beach, and all of Palm Beach County, South Florida.
West Palm Beach Divorce Family Law Attorney Practice Areas Include:
Petitions For Simplified Dissolution of Marriage
Uncontested Divorce Law
High Net Worth Florida Divorces
Florida Alimony Laws
Mandatory Disclosure Florida
Financial Affidavit Florida
Legal Separation Agreement
Division of Property
Dissipation of Marital Assets
Contempt and Enforcement