Life After Divorce

Watch For Tax Angles In A Divorce Agreement

This week’s post is by Wendy Knutson, CPA.

If you’re getting a divorce, you’ll have to work through a variety of financial issues governed by prevailing state law. But don’t overlook the federal income tax implications. Advance planning can be critical in the following areas:

Alimony vs. child support. Generally, payments designated as alimony in a divorce decree are deductible by the payer and taxable to the recipient. But the opposite is true for child support; the payments can’t be deducted by the payer and are tax-free to the recipient. Make sure that the decree accurately reflects your intentions.

Filing status. If you divorce before year-end, you must file your 2012 federal income tax return as an unmarried individual. Depending on your situation, you may fare better or worse as an unmarried filer. For instance, joint filers could be hurt by the “marriage penalty” if the income of the spouses are relatively equal. In that case, it may be advantageous to finalize the divorce before year-end.

Dependency exemptions.Generally, the parent who has custody of young children for most of the year is the one entitled to dependency exemptions for the children. However, a noncustodial parent may claim the exemptions if the custodial parent signs…

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21 Tips For Surviving The Holidays

The holiday season is typically a time for celebration with friends and family. Yet, when you’re divorcing, the holiday season can feel anything but merry. To help you enjoy this holiday season instead of dreading it, here are 21 tips you can use today.

1. Be patient

Even in the best of times, the holidays are usually a bit hectic. However, when you’re celebrating the holidays for the first time on your own, they can feel more than hectic. They can feel overwhelming! You’ve got so much going on emotionally with the divorce that the added tasks, events and scheduling of the holidays can all be just a bit too much. Be patient with yourself and your kids as you navigate the holidays. This is new and different for everyone and a little patience will go a long way toward making your first holidays post-separation/divorce enjoyable.

2. Be flexible

The holidays are about celebrating with family and friends and don’t HAVE to occur on only one specific day. I find that people with children who are celebrating the holidays for the first time as a single parent often get tied up in the idea that holidays can only happen on the official day marked on the…

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Straight From the Headlines!

In just 11 days Katie Holmes and Tom Cruise reached a divorce settlement.

For most of us, the thought of reaching an agreement with our former spouse in just 11 days seems like a fantasy. How were they able to do it so quickly? From what I can tell there are two major factors that allowed the actors to reach such a rapid agreement.

First, they entered into their marriage from a standpoint of starting a business together. Despite Tom’s use of Oprah’s couch as a trampoline when he announced his love for Katie, their marriage wasn’t just a romantic notion. They realized that marriage is actually a legal agreement much like a business partnership. Katie and Tom worked with lawyers to cover the possible contingency of their partnership not working and so had a prenuptial agreement that was very solid. This business approach to their marriage removed a good portion of what they could have spent time arguing about during their negotiations.

Second, they each know that Suri needs both of her parents. Despite how they may feel about each other, they apparently respect the other as their daughter’s parent and know they will need to have regular contact with each other to effectively parent…

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Insider Tips For Choosing Your Divorce Attorney Or Mediator

Whether you’re a man or woman, the dumper or dumpee, one of the very first things you probably realized you needed to do to get divorced is that you need to hire an attorney. If you’re like most people, you probably asked a friend or family member who’s been divorced who they used and then promptly hired that attorney. It wasn’t until after you’d already plunked down your retainer that you had any idea of what working with this attorney would be like.

If this sounds like you, you might be in for some surprised. This article will help you to better educate yourself about what you can and should expect from your attorney – AND how to select a new one if you decide to adjust course on your representation.

If, however, you’ve not yet selected an attorney, then READ THIS BEFORE you retain one.

STEP 1: Develop your short-list of attorneys. You need to interview (yes, interview) at least 3 attorneys before deciding whom you want to represent you. Go ahead and ask your friends and family for referrals, if and only if, your friends and family felt comfortable with their attorney.

STEP 2:Decide on the questions you want to ask your short-list of…

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How To Take That Post-Divorce Awkwardness Out Of Special Occasions

Family celebrating one of many post-divorce special occasions.

What do you do about special occasions like birthdays when you get divorced?

Let’s take a look at this question from a couple of different angles. First, let’s see what you can expect to be different. Next, let’s dig into the question of which ones you should still celebrate. Finally, let’s talk about how you celebrate these occasions.

So, what can you expect to be different about birthdays when you are separated and divorced? Most likely, you’ll celebrate fewer of your former in-law’s birthdays than when you were married. It’s also common that former spouses no longer celebrate each other’s birthdays. However, this isn’t always the case. Sometimes, former spouses will still contact each other on their birthdays. This is especially common when they have children together. You can expect that the way you’ll celebrate these occasions will change too.

Let’s dig into the question of which birthdays make sense for you to continue to celebrate when you’re separated and divorced. Many people have positive, healthy relationships with former in-laws and continue to celebrate birthdays with them. Notice the phrase, “positive, healthy relationships”. I don’t condone continuing to send your former mother-in-law a birthday card because you feel guilty or because you’re hoping that she’ll…

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