You’ve heard it said that “timing is everything.” The same idea is true for divorce. Although sometimes you have no control over when your marriage comes to an end, you can control the speed in which you file and obtain information. Divorce timing plays a large part in tax filing, but it also can give you a slight advantage during the proceedings. Find out more about filing when the time is right for you:
Make the First Move
Waiting for your spouse to file for divorce first is one of the worst mistakes you can make. There are legal benefits to being the one to initiate the process. Filing first can give you better terms from the very beginning. When a judge issues the temporary order regarding support or custody, the one who files typically has more control of the situation, allowing you to be in control while the divorce is still pending. Filing first also allows you to determine the end date of the marriage, which can protect you from any potential unnecessary expenses from a hostile ex-spouse.
When it comes to tax time, whether you file jointly or separately depends on the date you sign the divorce agreement. Typically speaking, filing a joint return usually works to your advantage and saves money. However, in some cases, you might be eager to register separately, because even if your divorce decree states that your spouse is liable for all taxes, the IRS still can hold you accountable. There are also tax consequences when dissolving a family business as a part of the property division. In fact, most tax considerations are based on the timing and duration of events throughout the year. Based on the IRS rules:...