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Litigation
Accounting & Divorce Accounting One of the first items that changes in the litigation accounting and divorce accounting process is the filing status for the income tax return. In order to file an optimized income tax return after a divorce with the IRS, there are a number of items that need to be considered.
1. Are you legally divorced or legally separated? 2. Who has custody of the children (if any)? 3. When making payments to the spouse, is it considered alimony or child support? 4. Was last name changed?
Litigation accounting and divorce accounting should be able to maximize the tax deductions and, therefore, reduces the tax liability for your income tax return. In short, an effective Litigation accounting and divorce accounting specialist should guarantee you to pay less tax on your income tax return.
By distinguishing the difference between legally divorced or legally separated, this can determine if the taxpayer can file jointly or not. Filing jointly usually provides a better income tax bracket than two individuals filing separately. In addition, whoever has custody of the children can file as the head of household, which has a larger standard deduction than filing the income tax return as a single person.
Speaking of custody of the children, while it may seems like the person who is making payment to the spouse (or ex-spouse) and child would have higher income, but this does not always directly translate into a higher tax bracket. After all, the bracket level depends on the amount of tax deductions that can be taken. As part of a litigation accounting and divorce accounting plan, it is crucial to the tax preparer to make sure which payment made is deductable and which is not. For various cases, sometimes it is better to set up the payment as alimony, but at times, it is better to set it up as child support. This is an important feature to set up when dealing with the divorce. A good litigation accounting and divorce accounting planner should advise your attorney how to structure the payment to increase deductible expense. Since alimony is deductible while child support is not, the wording in your divorce decree makes a lot of difference in terms of deductions for the income tax return.
As much as an income tax return can be optimized, filing to the IRS is the ultimate destination of the income tax return. When dealing with the IRS, it is important to file everything on time under the right identity. If the last name is changed after a divorce, the IRS would not be able to associate the changed name with the correct social security number (SSN). If the divorced spouse fails to inform the IRS about the appropriate name for the SSN, then the income tax payment made might not be associated with the right person. This may lead to a late filing penalty and interest or just a hassle to deal with for a long period of time. After going through a divorce, the IRS is probably the last person you want to mess with.
This
listing above is just a sample of the many things that should
be considered when filing an income tax return after a divorce.
You have spent enough money on your divorce; there is no reason
to pay any more taxes than what you have to. For the full details
of litigation accounting and divorce accounting please contact
us at 713-661-1040. About the author: Jim
Trippon, Houston
tax CPA and Litigation Accounting and
Divorce Accounting Specialist,
a name growing popular among millionaires who seek financial advice
in their IRS
problems in Houston and
in their search for professional Houston tax representation.
At Trippon & Company CPAs we use our 20+ years of experience in Litigation Accounting and Divorce Accounting to minimize your Federal tax liability. Call us at 713-661-1040 and put our experience at work for you!
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Individual
Tax Return Service
Individual
Tax Return Service
