Smart Decisions Today Can Lead to a Better Financial Future
When a married couple decides to divorce, they often do not realize the tax implications of the decisions they will be making. Even when both parties are very concerned about the financial aspects of divorce, tax issues are often overlooked.
The Pittsburgh divorce tax planning attorneys at Gentile, Horoho & Avalli, P.C., advise divorce clients in all matters. Our lawyers have extensive experience with high net-worth divorce and complex assets. In addition, the firm works with financial advisers and tax experts to provide clients with the knowledge they need to make informed decisions.
Tax Issues in Divorce
When financial matters such as dividing assets and income arise, it is wise to plan with each party's tax liability in mind. Careful planning can result in a better divorce settlement for both parties.
Because Pennsylvania is an equitable distribution state, tax liability during the year of a divorce is generally assigned to the party who earned the income, whether it is from investments, property or employment. Tax deductions will go to the party who made the payments if those payments were made from separate funds.
Spousal support and alimony payments are tax deductible for the payor and taxable income for the payee. Because the party making the alimony payments is often in a higher tax bracket than the party receiving the payments, this arrangement can be beneficial to both.
It generally is a good plan to give the spouse in the lower tax bracket more taxable assets from the marital estate. Each couple's financial and tax circumstances are unique, so you will want to discuss your finances with an experienced lawyer. We will advise you on the best way to handle the division of retirement plans, IRAs, pension plans, mortgages, businesses, stocks and other assets.
To make an appointment with our asset protection attorneys, please call or contact us online.
