Do Divorce and Taxes Belong in the Same Sentence?
Now that tax season has passed, everyone is expressing a sigh of relief. But for divorce attorneys and bankruptcy lawyers and the like the thought of taxes still sits firmly in their heads. Perhaps you aren't accustomed to hearing divorce and tax season in the same sentence, or bankruptcy lawyer and taxes in the same paragraph. As a Boise Attorney I actually hear those phrases togther a lot.
Taxes, Divorce and Bankruptcy; Where to Find Them
As a Boise Divorce Attorney taxes are frequent topic of conversation in my office. Part of a property settlement can and will revolve around taxes and the IRS. Who, for example, will receive the tax return for the year proceeding the divorce? Who will be able to claim the children as tax deductions? Who will be responsible for back taxes? As a Boise Bankruptcy Lawyer taxes are discussed primarily in terms of back taxes and non-dischargeable debt.
So who gets the tax deduction after divorce? Who get's the tax return? Who has to pay back taxes? Generally speaking, these are negotiable. Tax exemptions aren't necessarily tied to primary custody. You may have a situation where the parties share the deduction. They either alternate years or each takes the exemption for half of the children. The tax return may be split or may be used as a property settlement equalization. Likewise, the parties may split the back taxes or they may used to offset a debt or property allocation.
What Happens to Taxes in Bankruptcy?
Sadly, taxes in bankruptcy aren't negotiable! Back taxes must be paid. Taxes are a non dischargeable item in bankruptcy. What that means is that while some debts can be gotten rid of completely when you file Chapter 7 Bankruptcy, taxes are not one of them. Taxes are often a major albatross around the debtor's neck.
If you need to file for divorce or bankruptcy, we are here to help you will questions like these. Give us a call, 208-472-2383, and see what we can do for you.
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