During a divorce, a Mississippi couple will face various money-related issues they must resolve to complete the process and move forward. Property division, equitable distribution of marital debt and the possibility of spousal support are only a few of the money matters the two parties must take into consideration. In addition to these things, there are important tax issues to consider as well as these could have a long-term effect on stability.
Critical tax facts
Taxes may be the last thing on a spouse’s mind during his or her divorce. While this is an emotional and often daunting process, the following tax facts should not be overlooked at this time:
- Transferal of assets between spouse during a divorce will likely not result in tax penalties.
- The spouse’s marital status on Dec. 31 of that year determines his or her filing status.
- If a spouse wants to claim head-of-household status on taxes, he or she must be legally single.
- There could be tax penalties associated with lump-sum payments out of certain types of accounts.
Considering tax penalties and potential complications during the property division process can help a Mississippi spouse make effective and practical decisions for his or her future.
A clear view of the future
Taxes can be complicated, as is the divorce process. This is why it is helpful to work with an experienced legal ally who can help one make smart decisions that are sustainable and suitable for the future. When making decisions during a divorce, it is beneficial to maintain a clear view of the future by considering certain tax issues.