Sarasota lawyer

Tax consequences of divorce: Dependency exemption

In Florida, the parent that has the child the majority of the time typically receives the tax exemption from the IRS. However, within marital settlement agreements, the parties may negotiate for the parent with a lesser amount of overnights to alternate the exemption or have this exemption every year. For example, if the parent with the majority of the time does not need to file taxes, that parent may utilize this dependency exemption as a bargaining chip (worth approximately $4,050.00 in 2017 as a deduction).

The IRS requires in these types of scenarios for the parents to file a Form 8332 in order to allow the "noncustodial" or parent will lesser amounts of time-sharing to take the exemption.

Another consideration is the actual value of the exemption. Currently, for every $2,500.00 above $287,650.00 in gross income, the value of the exemption is reduced by 2 percent, up to $410,150.00 total gross income. After that gross income point, the exemption can no longer be taken.

This blog post is not intended to provide readers with legal advice or tax advice in any way. This does not create a legal relationship or agreement between the reader and Bouchard Law, P.A. Bouchard Law, P.A. and its attorneys and staff do not claim to be experts in tax matters.  Bouchard Law, P.A. recommends consulting a tax professional to fully evaluate your tax implications and consequences of your particular position.

 

Too young to have a will? Not if you have kids.

Why have your will created now? There are many reasons why putting off estate planning until you are older is a bad idea. A will allows you to decide who gets what when you pass away. If you do not have a will, Florida law controls how your assets are distributed.

First and foremost, do you have kids? One function a simple will does is appoint a guardian for your kids. This is the person or people you intend to have care for your children if you pass away. Of course, if you are married or were previously married to the other parent, your spouse/ex-spouse would take the children. This is not always the case when the parents were never married.

Something also to consider is ensuring your kids will be taken care of. Check with your insurance provider to determine the cost of life insurance. Oftentimes, they will offer a low cost solution with monthly payments. You may designate your child and/or guardian as the beneficiary of the policy. 

Why your case is probably not an "uncontested" divorce.

I often have folks visit me and state their case is an "uncontested" simplified divorce. I tell them it probably is not.

What exactly qualifies as simplified under Florida law? 

Generally, most divorces are contested one way or other. Simplified divorce involves no children, no alimony or spousal support, and, generally, no conflict whatsoever. The parties go to the Clerk of Court to jointly file the Petition for Simplified Dissolution. Most of these cases do not involve lawyers. Our firm finds that a simplified proceeding is a useful tool when the parties have not been married long and they do not own any assets nor have any joint liabilities (financial debts). The parties are not required to have financial disclosure, but are required to attend a final hearing. The parties also give up their right to a trial and the opportunity to examine/cross-exam the other parties and witnesses.

From the Florida Bar Consumer Pamphlet: Divorce in Florida

Not everyone can use the simplified procedure. Couples can use the simplified dissolution of marriage only if all the following requirements are met: 

· Both parties agree to the use of this form of dissolution proceeding.
· They have no minor (under 18) or dependent children.
· They have no adopted children under the age of 18.
· Neither party is pregnant.
· At least one of the parties has lived in Florida for the past six months.
· The parties have agreed on the division of all of their property (assets) and obligations (debts).
· Neither party is seeking alimony.
· Both parties agree that the marriage is irretrievably broken. 


If you and your spouse cannot meet all of the above requirements, you will have to follow the procedure of the regular dissolution of marriage process.

Where people run into problems when filing a simplified dissolution is when they fail to recognize and address their legal needs and rights thoroughly. For example, parties fail to recognize that pets are considered personal property under Florida law. If the parties do not address who retains the pet upon a simplified dissolution, generally, the pro se (the Clerk-provided, do-it-yourself) marital settlement agreement provides that personal property will stay with the person it is currently with. Then, later on, you'll find yourself in small claims court attempting to resolve the issue of who gets the dog, which should have been resolved via your divorce. Other issues that people fail to address involve changing titles/registrations on vehicles, relinquishing their property rights in homes and land, health insurance/care needs, and other types of support.

If you have questions about your case, give us a call at (941) 764-1146 to schedule a free consultation.