Law Office of Jacqueline McNuttLaw Office of Jacqueline McNutt

Your Family Is Our Focus

scroll

view our Practice areas

San Marcos Texas Legal Blog

How to find tax benefits in divorce

In the past, people could deduct any alimony they paid from their taxes. Although recipients were taxed on received alimony, this arrangement generally resulted in less taxes being paid overall, which helped payers afford higher monthly alimony payments. Changes to the tax laws have made it so that people can no longer deduct any alimony payments. This means that a couple going through a divorce may have to look elsewhere to find tax savings.

A Texas couple who has investments that produce large gains could use those funds to offset the loss of any tax benefits regarding alimony. For example, if the gains from an investment are less than $39,475, it will not be taxed at all. One party might agree to accept the gains or the investment itself as a lump sum alimony payment, or in exchange for lower monthly payments. Since gains between this amount and $200,000 are taxed at 15%, offsetting alimony with capital gains that are not taxed can help reduce both taxes and minimize future payments.

Don't let divorce ruin retirement plans

Saving for retirement is not something that happens overnight. Most people in Texas spend decades putting away money for later in life, but divorce can disrupt even the most carefully planned retirement. Regardless of a person's age when filing for divorce, it is important to be aware of how retirement savings are handled during divorce. Otherwise, protecting future financial security during retirement may be much more difficult.

Even if a couple's retirement savings is only in one person's name through his or her employer, the account is generally still community property. However, a person cannot simply withdraw the amount allotted to him or her during the divorce without incurring penalties and paying taxes. To avoid losing a portion of retirement savings to these extra costs, a couple should be certain to obtain a qualified domestic relations order, or a QDRO. This allows a person to legally transfer money out of a retirement account with incurring any penalties.

The dos and don'ts of social media in a divorce

There is a lot to take care of when you plan on divorcing. Although it may seem like a sad time, many people still manage to find joy in life. One Texas woman threw a party after her divorce where she burned her wedding dress and had a celebration with all her friends. 

You may feel good, but you still need to be careful about what you say to others. Be extremely cautious about what you post on social media. One wrong post could cause headaches down the line. Until the divorce is final, it is best to limit your time on social media and follow these guidelines.

Maintaining child support when co-parenting

A parent is obligated to provide financial support for his or her children which is pretty straightforward if a child's parents are still married. After divorce it takes a little more effort to make sure a child is still financially secure. Child support is usually the best method for this, and parents in Texas can even make their own support arrangements through alternative dispute resolutions, like mediation. Still, it is not uncommon for co-parents to experience support-related issues, so here are a few ways to get back on track.

Communication is extremely important for parents who are committed to co-parenting after divorce. It can still be difficult to address financial matters with an ex-spouse, though. Although it might be uncomfortable, it is a good idea for co-parents to regularly discuss children's financial needs, including things like new extracurricular activities, new medical bills or upcoming changes. Whether in person, through email, over a text or on the phone, talking about a child's finances about once a month is a good idea.

Do I need to worry about my separate bank account during divorce?

Married couples usually share most things, like housing, beds and groceries. Some younger adults feel inclined to change up how they do things, which is not necessarily a bad thing. With it easier than ever to simply transfer money to another person, some Texas couples are increasingly choosing to maintain separate bank accounts during marriage. However, this can become a problem during divorce when individuals do not understand the difference between community and separate property.

Community (marital) property is anything owned jointly by a married couple, and those items are subject to property division. Separate property is anything owned individually, either acquired before marriage or under unique circumstances. Young adults often believe that maintaining separate bank accounts will protect their money and incomes, marking those assets as separate. However, this is simply not the case.

Does child custody affect my taxes?

Money is a central aspect of many issues that arise during divorce. From things like alimony and spousal support to property division and more, people in Texas are understandably focused on making sure their post-divorce finances are in order. However, many people end up overlooking the future tax implications of the decisions they make during divorce. Even child custody can affect how taxes might look in the future.

Claiming a child on a tax return might not be quite as lucrative as it was before the Tax Cuts and Jobs Act of 2017 eliminated the dependency exemption, but it is still important to figure out which parent gets to claim a child. Tax credits for the child as well as earned income credit are still benefits for claiming a child. After divorce, only one parent can claim a particular child per year.

Can unemployment make divorce impossible?

Losing a job is rarely an easy experience, but it can be especially difficult when a person is laid off in the middle of a significant life transition. Being laid off or fired in the middle of a divorce means that an individual will have to face some unique hurdles during the process. This makes it all the more important for those in Texas who are dealing with such a situation to be aware of how their actions could influence their future and the outcome of their divorces.

How a person lost their job is an important distinction to the court. Take, for example, a person who lost their job because of company-wide layoffs. The court would probably take this into consideration when looking at how child and spousal support should be calculated. If a person was fired because of misconduct at work or otherwise poor behavior, the court may determine that support payments should reflect his or her former income.

Fathers, keep this in mind after child custody

During a divorce, parents generally do their best to prioritize their children's well-being. This not only means crafting a child custody agreement that keeps their best interests at heart, but also being there for them. Some newly divorced fathers in Texas struggle with this, but here are a few tips to keep in mind when navigating child custody.

While unhappily married parents may have been building up to divorce for quite some time, children might not have the same opportunity to mentally and emotionally prepare for the process beforehand. Even if they did, experiencing their parents' divorce can be extremely difficult. Children might lash out at one parent or both, which can make some fathers feel as if they have failed their child. Some may even feel tempted to modify their custody schedules so that their children can spend more time with their mother. Instead, fathers should try to not take these actions personally and to do their best to validate their children's feelings.

How to cope with the pain of divorce

Divorce is not just about figuring out various legal and financial issues. It also involves a lot of emotional pain. The end of your marriage may cause you to feel numerous uncomfortable and scary feelings, such as grief, guilt, anxiety, depression, anger and resentment. 

As painful as these emotions are, they are usually part of the natural grieving process. Although there is no way to completely rid yourself of these feelings, there are plenty of ways to cope with them. Here are some healthy tips for managing your emotions as your marriage ends. 

Will you deal with these common investments during divorce?

Investing might seem like a far-off reality for the average person in Texas. As such, it may come as a surprise for some people to learn that they have already made fairly significant investments in not just real estate, but also their future. Purchasing a home and saving money in a retirement account are both considered forms of investments. So how should these investments be dealt with during divorce?

Investments like real estate often involve both a financial and emotional component, especially if the property in question is the family home. This type of investment comes with a certain amount of upkeep as well as other financial commitments, such as property taxes. Couples must decide whether the person who wants to keep the home is financially equipped to do so. When that person does not have the means or when couples cannot decide who should keep the house, it is sometimes better to sell the property and divide the profits.

Email Us For a Response

Let Us Help You

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Law Office of Jacqueline McNutt
1712 N IH 35
San Marcos, TX 78666

Phone: 512-212-4840
Fax: 512-727-0165
Map & Directions

  • Pay Bills
  • LAWPAY Credit card processing
  • Visa MasterCard