Nashville View

Tax Planning in Divorce

Nashville Attorneys Experienced in Family Law Matters

For many of us, getting our taxes in order each year is a difficult endeavor, even if nothing has changed significantly. That difficulty only increases as you plan for a divorce. Accounting for your taxes before, during, or in the aftermath of a divorce may be complicated, especially when children are involved. The Nashville divorce lawyers at Martin Heller Potempa & Sheppard PLLC assist Tennessee residents in preparing for any issues that may arise, while ensuring that the proper protocols and understandings are in place. We take the time to make sure that our clients understand which exemptions or deductions may be affected by divorce proceedings and the decisions made therein. Our family law attorneys are dedicated to reaching a marriage dissolution agreement that fits the needs of a particular client and his or her family.

How Divorce Proceedings May Affect Tax Planning

Tennessee law encourages both parents to maintain an active involvement in their children’s lives and share in parental responsibilities. The legal custody of a child refers to a parent’s right to make certain decisions on behalf of a child, including schooling, health care, and other critical matters. For tax purposes, this is important because a child of divorcing or separated parents may be declared as a dependent when determining deductions for medical expenses, if both parties pay these costs.

Generally, whoever is deemed the custodial parent is the parent entitled to declare a dependency exemption for their child or children. In Tennessee, the parent with primary physical custody, who spends the majority of the time with the child, would be considered the custodial parent for tax-related purposes. Although tax exemption status is not a primary concern in reaching agreements regarding child custody, it may factor into how child support payments are allocated. In some cases, a non-custodial parent may also be entitled to a dependency exemption, such as when a child lives with that parent for over half of a given year.

In addition to child-related tax planning, there are certain other deductions to take into account. For instance, attorney’s fees incurred during a divorce in relation to pursuing alimony or dividing retirement or pension funds may be deductible in Tennessee. Also, alimony payments are taxable for a recipient and deductions for a paying spouse in this state. Other tax issues that may arise during a divorce include property-related taxes upon the division of assets, as well as gift and estate tax matters and the filing status of each former spouse.

Contact a Knowledgeable Divorce Lawyer in Nashville

Divorce proceedings are often stressful, no matter how amicable both parties may be, and that stress may be compounded by concerns about taxes. The Nashville divorce attorneys at Martin Heller Potempa & Sheppard PLLC offer comprehensive and diligent legal services to people who are going through the dissolution of a marriage. We are available to answer all divorce-related questions and assist with any concerns that may arise. Our firm represents individuals across Davidson and Williamson Counties, including in Franklin, Sylvan Park, Cool Springs, Bellevue, and other communities. If you are involved in divorce proceedings or need assistance with another family law issue, call us at 615-800-7096 or contact us online to discuss your legal options.