If you are faced with the process of going through a divorce, we all tend to hope that it is an amicable experience. However, most of the time it is not only an emotional journey, but it can also be financially devastating. In a 2012 article published in Forbes Magazine titled, “To Have And To Hold On To,” the estimated average cost of a divorce in the U.S. ranged from $15,000 to $30,000. Understanding your options to avoid those costs requires that you have the right team to support you through this process. Be prepared and consider the following financial impacts when you and your spouse file for divorce.
Financial Consequences for Divorced Couples
Whatever the outcome of your divorce, it is almost certain that both individuals will suffer financial consequences. The first financial impact is the separation of one household into two. While one person will remain in the household and pay the mortgage, the other person must be responsible for finding temporary or new housing and pay their new mortgage or rent. In addition, bills will be split into two including cable, Internet, utilities, and insurance policies. Couples will also have to secure their own independent checking and savings accounts and credit cards. You can see how quickly living expenses can double with income staying relatively the same and how difficult it will be to straighten out your finances.
Love, Hate, and Taxes for Divorcees
Unfortunately, when it comes to filing status, the IRS will not take pity on divorcees. So it is wise to have all of your finances in order so that your life does not become more complicated with tax issues. Keep in mind, the reason timing your divorce is critical is because it may affect the amount of taxes you will have to pay given your tax filing status.
Alimony or spousal support payments, either received or made the previous calendar year, also have tax ramifications. If you have children, child support payments are not going to be tax deductible. While there are certain tax benefits on child support payments in Georgia, the primary custodial parent will be at an advantage.
When it comes to selling or transferring property and assets, a capital gains tax is not immediately generated during the divorce. While you may be able to determine other expenses that will be taken off your bottom line, capital gains tax may be hidden from view.
Make it all count by retaining an experienced tax professional to work closely with you and your divorce attorney.
Attorneys Fees for Divorce
Lastly, understand that there will be legal fees when you retain a divorce and family law attorney. Since two people will be divorcing, there may be two legal teams. Even if you do this yourself, expect to spend several thousands of dollars and most important, time. Fees will also rise and become more expensive if both spouses are not talking to one another and especially if they only communicate through their divorce attorney. Consider mediation and collaboration.
Speak To Our Experienced Georgia Divorce Attorneys
The divorce process is a major life transition, an emotional journey and financially devastating. Understand your options and ensure you have the right team to support you through this process. Contact our caring and experienced Georgia divorce attorneys today for a consultation. With three offices in Atlanta, Alpharetta and Marietta, we proudly serve our clients throughout the Atlanta metropolitan area. Call us at 770-280-1488 or submit a contact form here today.