Monday, March 8, 2010

When to Get Divorced to Avoid Big Tax

When to Get Divorced to Avoid Big Tax
If you both have similar levels of income, choose December since the marriage penalty may be avoided. If one has more income than the other and both want to save taxes, choose January. Individuals legally separated under a decree of divorces or separate maintenance agreement are not considered married.
Although there may be a tax incentive to do so, the IRS maintains that couples who divorce immediately before year-end and remarry immediately after the start of the new year are considered married at year-end for tax purposes.

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