Top 5 To Dos Before Saying “I do”Written by by Jennifer Coleman, M.S./ Ed.S., N.C.C., Rosen Divorce
Today, nearly half of all marriages don't last. Everyday I work with couples going through a divorce, many times over preventable conflicts. I’ve learned about what needs to be discussed before making a life-long commitment. If you’re planning to get married this spring, here are a few things to do before you say I do. 1. DO allow yourself enough time to make one of your biggest life-altering decisions. Ask yourself why now and why with this person? You should be able to answer this in an affirming and positive way. The relationship should not be reactive to fill an empty space in your life, perhaps a past relationship, a surprise pregnancy, or absence of family. Lots of people go into a relationship still having baggage from a previous one. If you deal with your previous relationship losses successfully, they won’t come to haunt you or your future spouse later on. Also, keep in mind that opposites attract, but they are really hard to live with. The more in common you have with your spouse, more likely relationship will last.
2. DO discuss having children and if this is something as a couple you want to do. Also, discuss about how many children you’ll plan to have and when you’ll have them. What parenting practices will you adopt to raise your children? Who will stay at home or will both parties work? You should also define parenting roles as individuals and as a couple.
3. DO create a financial plan together. A lot of times people avoid talking about this, but you need to define financial goals and expectations beforehand. Don’t just know how much your future spouse makes, but know whole picture. Who will be in charge of balancing checkbook? Will you join your accounts or will they be separate? What are your top financial goals together? People have different spending habits and different financial styles that are often influenced by family. What happens if one spouse starts spending excessively? How will this be handled? Speak with a financial planner and retain one together.
4. DO compare personal goals versus goals as a couple and obstacles that may arise. If one party wants to move to California for a job promotion and other desires to live near family in Florida, that’s something to discuss now. How will you as a couple make life-altering decisions on which you may not agree? Surely, not all your goals will match that of your partner, but there needs to be decision-making beforehand on how to handle these differences. If one party longs to have children shortly after marrying, while other wants to wait to start a family and hopes to attend graduate school, this could create tension in marriage and lead down road to separation or divorce.
Divorce and Uncle Sam: Top 10 Things You Should Know When Filing Your Taxes Written by by Jessie Danninger, CPA, Rosen Divorce
If you’ve recently divorced or separated from your spouse, here are a few things you should know for upcoming tax season:
1.What is my filing status? (Married, Single, Head of Household) Marital standing at year end determines your filing status for entire year. If you have a decree of divorce or separate maintenance, signed by a judge, you should file as single. Regardless of whether you have a signed decree you may be able to file as head of household. Filing as head of household may reduce your income tax obligation, but to qualify following conditions must be met: oYou paid more than ½ cost of keeping up your home for tax year, oYour home was main home for your child for more than ½ year, and oYour spouse hasn’t been a member of household for 6 months. If you can’t file as single or head of household, then you must either file as married filing joint or married filing separate.
6.Should my spouse and I file as married, filing separate or married, filing joint? Filing joint may provide some tax benefits over filing separate. However, by filing separate IRS can’t hold you responsible for any unpaid taxes caused by your spouse’s actions or omissions. The “innocent spouse” rule provides relief from this responsibility in some cases.
2.Is alimony taxable? In general, alimony is taxable to recipient (line 11 of 2004 Form 1040) and deductible to payor (line 34a of 2004 Form 1040). However, some couples stipulate in their separation agreement that alimony won’t be deductible to payor, or taxable to recipient.
3.Is child support taxable? No. Child support is neither taxable to recipient nor deductible to payor. If payor owes both alimony and child support but pays less than total amount owed, payments apply first to child support and then to alimony. If separation agreement doesn't delineate separate alimony and child support payments, general "family support" payments are treated as child support for tax purposes, unless alimony qualifications are met.
4.Who gets to claim dependency exemption for children? In general, as long as parents combined contribute at least ½ of support of child, custodial parent gets dependency exemption for child. If custody is split or undeterminable, parent who had physical custody for greater part of year gets dependency exemption. Custodial parents can waive their right to dependency exemption by filing Form 8332.
5. Who gets to claim Child Tax credit and Household and Dependent Care credit. Only parent who claims exemption for child may claim Child Tax credit for that child. Unlike exemption, it can’t be traded. If you are custodial parent, you can claim Household and Dependent Care credit for child even if you cannot claim child’s exemption. If you are non-custodial parent, you cannot claim Household and Dependent Care credit for child even if you can claim child’s exemption.