The financial impact of a divorce is often one of the longest-lasting challenges that families will face. Divorces can be expensive, even without the changes in household income and bills. This is especially true for divorced couples with children. The way divorced parents approach filing their taxes each year is…
The American Rescue Plan Act of 2021 (hereinafter “Plan”), also called the COVID-19 Stimulus Package, was passed by Congress and officially signed into law by President Joe Biden on March 11, 2021. The Plan seeks to aid the economy in recovering from the effects of the COVID-19 pandemic. One significant…
Dear Carolyn: My ex and I share the children fifty-fifty. We have three children. I make approximately $25,000 more than the other parent. I pay child support even though I have them half the time. Our child support order says nothing about who gets the dependency exemptions, and I get…
Dear Carolyn, It is tax time. I am divorced and have two children. I pay $2000 per month in child support, and my ex (the mother) doesn’t even work. She will not give me the dependency exemptions for the children. The judge didn’t give them to me either. They live…
Forget it! Forget about the alimony deduction for all new decrees or instruments post-2019. (See Part I for modification of pre-2019 alimony orders and agreement, as modification has a separate set of rules.) The deduction is gone absent a congressional miracle. That means on December 31, 2018, or before you…
Previously, we examined the paragraph and subparagraphs defining “divorce or separation instruments.” Now let’s take a look at which sections of TCJA incorporate these subparagraphs. Sections incorporating all three subparagraphs of the definition of divorce or separation instrument Post-2018. The two sections of TCJA that adopt all three subparagraphs of…
The repeal of the alimony tax sections for the inclusion of income and deduction has an ancillary impact on other divorce tax issues. The effective date for all ancillary issues discussed in this article is December 31, 2018, the same as the alimony repeal. These December 31, 2018, changes shall…
Divorce was hard enough, and now alimony tax reform. Do you feel good or bad about alimony? No matter your answer, this alimony tax reform revolutionizes the divorce arena, and you need to know how it may affect you and your clients. Judges need to know how it might affect…
Yancey v. Comm’r, T.C. Memo. 2017-59, 2017 WL 1289451 (2017) Facts: A husband and wife filed joint returns. The returns were prepared by the wife. The returns understated the amount of tax due, mostly because they wrongly double-counted certain gambling losses incurred by the husband. The IRS assessed a deficiency.…
Stapleton v. Comm’r, T.C. Memo. 2015-171, 2015 WL 5049758 Facts: A father and mother had two children. The parents were never married. No court was ever asked to decide custody, but the parents agreed that the father would have the children every Monday and Wednesday night and every other weekend. In…