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Host: Well, February for some, of course, is the month of love, but for others, is kind of the month of heartbreak. Attorney Jonathan Marks with The Marks Law Firm joining us this morning to talk a little more about this. Good morning to you.
JM: Good morning.
Host: So why February?
JM: Well, I think it has a lot to do with either the family relationship, or also the economics. With a family relationship, there may have been problems coming into the winter. They didn’t want to deal with it during the holidays, you sort of put those things aside so it’s more of a family environment. But once you get through the holidays and January comes along you have more of a thought process, and then February can become a call to action. Another reason is that once February comes along, you get into that February-March-April time frame, you’ve got tax refunds that allow the economics to really be a little more open, and then people have the funds that maybe weren’t available toward the end of the year because of the holidays available to retain attorneys and go through the process.
Host: There was also a recent study talking about more people getting divorced now, which means the economy is getting a little bit better. People are able to buy that separate stuff.
JM: I would agree with that, I think we did see sort of a swoon go down a little bit through 2008-2009, I think that the economy, you hear a lot about how it affects things, but I think it really only affects the timing of when a divorce happens, as to whether or not it really persuades someone to go and file through the divorce.
Host: All right. If someone this year is going through a divorce. What do they need to know when it comes to actually filing their taxes?
JM: Well, the first thing you need to think about is what’s the best way they can maximize their dollars. Typically it’s better if you file joint with your spouse so that you don’t have these arguments as it relates to who’s going to claim the children, or how is the mortgage deduction, another real-estate related tax deductions going to be divided. So that’s always best to maximize your dollars, and then if the two of you can be cohesive on this front, then you can figure out how the division of that asset works. If not, you’re already going through the process and there’s going to have to be a discussion between the attorneys and hopefully and accountant to figure out what’s the best way that each party can figure out a way to get the most amount of money if they can’t come to an agreement of how they are going to file a on joint status.
Host: So how will they know in terms of who’s going to get the dependents and things like that?
JM: Typically, once the divorce is over, a parenting plan is going to dictate as to who gets to claim the children each year. If they haven’t gotten to that period in time and they’re just still going through the process, it’s really going to have to be negotiated. Unfortunately what you do see, is sometimes there is someone who does that race to go file first and they claim the child. If that happens and the other party should have been the one who should have claimed the child, you’re going to see the IRS eventually get involved, and there’s going to be a dispute as to who should have been claiming the child during that time period. And the same can happen as it relates to a mortgage interest deduction as well.
Host: What can be deducted? Can the child support be deducted? Can maintenance be deducted? Can divorce be deducted?
JM: Child support cannot be deducted in the state of Missouri. Maintenance can be deducted, so it’s income to the individual that receives the maintenance payment is tax deductible to the payor. In regards to attorneys fees, some fees can be deducted. It’s something you really have to have a good discussion with your accountant with to make sure it’s a proper deduction.
Host: Certainly worth some things going over, if you can get some of those deductions.
JM: Absolutely. Just like when you’re going through the divorce process, you want to make sure you have an educated attorney that walks you through it. When it comes to these tax purposes you really need to work with a qualified accountant and tax preparer and make sure they do the best thing for you.
Host: Jonathan Marks with The Marks Law Firm. Thank you so much. We appreciate it.