The annual tax season is often stressful enough for many Americans even before they have to worry about what happens to them in the event that they got divorced over the course of the year. This kind of major life event can often affect people's filing status in a number of different ways, but moreover brings with it a number of potential other challenges that can alter liabilities, and thus have to be taken into account.
For example, many consumers face significant expenses when going through a divorce, and while some of these are deductible, others are not, and knowing the difference is extremely important, according to a report from Accounting Web. For instance, personal advice, counseling, or legal fees for a divorce cannot be written off, meaning that no matter what the conditions being argued - ownership of a property, alimony, and so on - spouses cannot deduct these costs. This is also true of divorcing couples for which one spouse is paying both parties' legal fees.
However, fees related to the collection of alimony can be written off as an itemized deduction, as that money is, in fact, taxable, the report said. However, such deductions can only be made once the total of fees paid exceed 2 percent of the adjusted gross income of the spouse receiving the alimony payments.
So what is deductible?
When it comes to what divorcing Americans can write off with regard to the advice they receive, taxes certainly qualify, the report said. As with any other kind of tax advice provided by a professional, consumers are allowed to write off whatever counseling they received from licensed professionals. This is also the case if the person's divorce lawyer also provides tax counseling, but if that is the case, they will have to take the time to note the distinction in their filings (i.e. they cannot write off all their legal fees because of that advice, but rather just the part of costs specifically pertaining to it).
For these reasons, and more, it might be wise for consumers who have gone through a recent divorce to work closely with a tax professional who can explain the ins and outs of their situations and how those affect their filing status going forward.
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