OT ? about divorce
 

Hello fellow FFofA,

Just trying to figure a few things out and hoped someone here might have some words of wisdom.

I have been looking over the divorce papers for my state and the situation that I am in, makes divorce fairly simple and pretty straight forward. We do not have any minor children (both in college), willing to split debts and assets 50/50, so for the most part that part is an open/shut deal. And at this time of year, the turnaround is merely a few days if we self file, so it could be over next week, if I filed today.

My question is this: are there benefits or liabilities to having our divorce be final prior to the end of the year? I am thinking tax consequences. Would it be better to wait until the beginning of the year?

Does anyone have any experience with this?

Thank you.

I think the only benefit would be if it is more advantageous to file as married filing jointly or single. I can't really remember this, but I think if you were married for any part of the year you can file as married filing jointly or married filing separate. Just check the IRS rules for how to file.

I'd call a tax accountant to ask that question.

I also always recommend at least consulting an attorney just so you know what you are potentially giving up. If you choose to give it up for the sake of peace and expediency (totally worth it for me, but not for everyone), you can but you should at least know what it is.

I would, too. I seem to remember your status for tax purposes is whatever it was on Dec. 31 (my divorce was finalized in late December, we had been separated since the summer, and I filed as single). But my memory is like Swiss cheese and the IRS aren't fun to deal with, so I would check with a pro.

This was 14 years ago, and in Colorado; but when my ex husband decided to end our marriage we went to court in October, and the judge said that we are divorced today, but for tax purposes, he would set the date for December 31st for a more preferable/less tricky tax filing. Don't know if that helps, but...

Your marital status on Dec. 31st is used to determine how you file. If you both work it is likely to be better, tax-wise, to not be married. But without knowing specifics it's impossible to say. Ask your accountant. He or she should be able to answer this quickly. If your 2014 income situation is similar to 2013 he just has to run the return both ways.

I'm a CPA, btw.

I lived in the same type state as you do. Its called a No Fault in my states case. I had a 3 year long divorce. She contested everything, at every step of the way. I filed Married filing separately status during this. It actually caused the IRS to look more closely at our returns to make sure nobody was playing games. I don't recall if there was any actual tax advantages as a result as far as how much I paid etc. But it got my ex in hot water when she tried to cheat the IRS on hers.

As far as I know she is still making monthly payments and that was like 10 years ago. She didn't lie a little bit. LOL

Thank you all for your input. I guess I shall be making a few phone calls :)

Smiley, I agree with Lexie that it would be worth at least finding out what you'd be giving up, as property settlements are sometimes more complex than we imagine. Just a scenario, not saying it applies to you, but if you were a stay at home Mum, and he was out developing his career and earning power, then future earning power would be taken into account.
I was going to settle for much less than I was entitled to until I saw a lawyer (compulsory in Australia so you understand what you are agreeing to); it turned out I was entitled to more. My ex had moved on to another woman, so I didn't have as much motivation to be generous to her.