There are many reasons that people in California decide to end their marriage. These include job loss, economic troubles and other life changes. It is unclear how many people in our state and elsewhere consider the potential tax benefits of making the decision to divorce, something which now may make sense to think about.
According to a recent report, there are benefits for those getting a California divorce in terms of the amount of taxes that they owe each year. For example, single individuals may find that they do not have to pay taxes related to the new healthcare legislation that has been passed by the federal government and becomes effective this year. However, a married couple that together earns in excess of $250,000 may be required to make a higher tax payment.
Additionally, there are other tax benefits for a single filer that do not apply to married couples. These benefits include the ability take advantage of tax exemption benefits solely available to single filers, based on income restrictions. These rules apply only to married couples with significantly lower incomes.
Though tax considerations are rarely the first thought when a couple decides to divorce, they may come up as the process proceeds. This may be because of the benefits that both soon-to-be former spouses can receive after ending the marriage. Because the rules can be complicated, it may do well for anyone considering divorce to review all applicable laws and guidelines, including those applying to taxes, as they begin the divorce process.
Source: Forbes, “Want To Save On Taxes? Get A Divorce,” Tony Nitti, Jan. 22, 2013
