Providing Assistance to Clients from CPA’s
If you and your spouse have made the difficult decision to end your marriage, you will encounter many different issues that need to be resolved before a court will legally dissolve your marriage and allow you to put this process behind you. One of the many aspects of any California divorce is the property division, which must be done in accordance with California’s community property laws.
This process can lead to several different tax consequences for both parties, and anyone who wants to fully understand those potential consequences ahead of time should seek the help of divorce attorneys who can provide clients with resources that include consultations from Certified Public Accountants, or CPA’s. Below is a brief overview of what a CPA may advise you of before you complete your divorce.
Your Next Tax Returns
If you have been married for over a year, it’s likely that you and your spouse have been filing joint tax returns. For most people, filing joint returns is advantageous for many reasons, but when it comes to a divorce those advantages could disappear depending on the circumstances of the situation. The opposite problem can also arise when people assume that they should file separately and do so only to find out that they have incurred avoidable tax liability. A CPA will help you make this decision ahead of time so that you can maximize your tax position.
Another common problem that arises is that when a spouse is being paid spousal support, he or she often assumes that there will be no income tax due on those payments. This common mistake is likely the result of child support payments not being taxable, but the fact is that spousal support payments are considered income and do incur tax liability when it’s time to file that tax return.
Wills and Trusts
If any wills or trusts will be liquidated or changed as a result of the property division, any of these steps could lead to tax liability depending on the circumstances. An experienced CPA will be able to explain these potential risks before any steps are actually taken to change the structures of these instruments.
Overall, completing a divorce is an involved process that requires attention to detail, diligence and the potential for the need for several types of professional help. Working with the Ventura County divorce attorneys at Zonder Family Law will provide you with access to the types of professional help you may need. Contact the firm today to schedule an initial consultation.