If you are getting a divorce, it is important that you understand tax laws and other basic financial concepts. While there is no state income tax in Texas, you may have to account for property taxes or other costs when creating a budget after a marriage ends. Let’s take a look at how you can help create a financially secure future for yourself as a single person.
Put together a competent team of financial advisers
Ideally, you will work with accountants, real estate agents and other professionals who may be able to help you create a long-term financial plan. They may help you determine which assets to pursue in a divorce settlement such as a home or retirement account. You may also learn more about the potential tax consequences of dividing a retirement account pursuant to a divorce.
Make sure your spouse is being honest
It is important to ensure that your spouse is disclosing his or her assets in an honest and transparent manner. In some cases, an individual will attempt to hide income in an effort to obtain a lower monthly child support payment. Your spouse may also try to defer income or intentionally undervalue assets to obtain better terms in a final divorce settlement.
Make sure that outstanding tax bills have been paid
Even if you had no role in filing a joint tax return, you could still be held liable for income taxes that haven’t been paid. Therefore, it is important that you review tax returns from the previous three years to ensure that there is no outstanding balance owed to the government. In some cases, reviewing previous tax returns may provide information that can be used to reduce your upcoming tax bill.
It is generally in your best interest to know everything that you can about the potential financial consequences of a divorce proceeding. An attorney may be able to explain how ending a marriage will impact your tax bills as well as your overall lifestyle.
