It's always unfortunate when a divorce must occur, presumably, you loved your spouse when you each agreed to marry the other. The old saying of, “It is better to have loved and lost than never to have loved at all” is little consolation when experiencing the heartfelt loss and sorrow of a divorce. Ideally, you and your spouse can part ways amicably, but there are situations in which one party must defend their rights toward future financial success, and how does divorce affect taxes in Utah is an unfortunate issue which must be addressed.
1. Child Custody and Dependents
Child custody is an issue to be resolved by the court and Social Services. Regardless of what custody arrangements best suit the interests of the child, there are going to be financial responsibilities for each parent. The IRS only allows one parent to claim the child as a dependent, so it's important to know which parent the court decision will take such a deduction when determining custody status.
2. Alimony Deductions
A further issue of tax deductions is that traditionally alimony payment was a tax deduction in the state of Utah. A new law says that instead of the payer of alimony deducting the payment from their tax obligations leaving the recipient free of tax burdens, the recipient is now going to be responsible for paying the tax according to their income and tax records. Assuming the divorce can be practical rather than spiteful, it's best for each side to consider how such laws can affect each spouse.
3. Employer-Provided Spousal Benefits
An aspect often overlooked during divorce is the benefits a former spouse's employer provided. Health insurance is the most obvious, but also dental care for your children, Social Security, 401K Plans, or even small fringe benefits can be things one spouse has come to rely on from their husband or wife.
The final answer to the question of how does divorce affect taxes in Utah is that perhaps it shouldn't, but it does. That's why courts handle divorces. Courts don't deal with emotions, rarely recognize the pain people suffer when going through a divorce, yet determine what is fair for everyone involved according to their perception. And that explains why you need a lawyer to provide your case as it should be perceived.
David Pedrazas is a premier divorce and family law attorney in Salt Lake City, Utah. He graduated from the University of Utah Law School in 1997, and has been practicing for over 14 years in the areas of divorce, child support, child custody, paternity, alimony, property division, and parent time.
Law Office of David Pedrazas, PLLC
3325 South 1100 East
Salt Lake City, UT 84106
801-263-7078
