Use the following financial checklist if you find yourself considering divorce. This list is not all-inclusive and is no substitute for the professional assistance of your accountant and attorney.
When contemplating divorce
- If you don’t already have a credit card in your own name, apply for one.
- Consider establishing a credit history in your own name by taking a small bank loan. If necessary, have a friend or relative cosign.
When divorce has been decided upon
- Get a lawyer. If you don’t know any, ask friends or the state bar association for recommendations.
- Close out joint credit and checking accounts.
- Take taxes into account when dividing property. Assets equal in value may not be equal in their tax consequences.
- Have your attorney specify the tax advice portion of his bill. If you meet the level for deducting miscellaneous expenses, this amount will be tax-deductible.
- Be sure your divorce agreement addresses who gets to claim estimated taxes already paid and who pays any additional IRS assessments on joint returns filed in prior years.
- Check all insurance policies as well as your IRA and other pension plans, and change coverage and beneficiaries as appropriate.
- Review your will for appropriate revisions.
- If you’re receiving alimony, consider an IRA. Alimony is considered compensation for IRA contribution purposes.
- Review your tax withholding and estimated tax payments for any necessary adjustments.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter.