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Tax debt during marriage may be a problem in divorce

Virginia residents contemplating divorce may be interested in the way taxes are affected by divorce. Both spouses are responsible for paying taxes owed during a marriage. Making sure returns are filed correctly and that the couple's tax bill is paid is an important step toward moving on after the marriage has ended.

Filling out and signing tax forms means the filer understands to the best of his or her ability that the forms are filed properly. On occasion, spousal deception may lead to one spouse intentionally misstating income and deductions. This might result in the IRS placing a lien on property or freezing an individual's bank account. One way to avoid this is to review the tax form carefully before signing it.

Once a couple files an income tax return jointly, the couple is responsible for paying the tax. In addition, if there is a mistake on the return, the couple shares the responsibility of that also. Alternately, filing separately may result in a higher tax bill due to loss of deductions and placement in a higher tax bracket.

In some marriages, one spouse works or one spouse earns more than the other does. Since tax debt is shared during the marriage, it might be prudent for the lower earning or non-earning spouse to file an indemnification agreement, which makes the higher-earning spouse responsible for the taxes.

If a spouse wants to check on tax returns filed during marriage, it is possible to obtain a transcript of one's filings by using Form 4506. This is an important step prior to agreeing to a divorce settlement.

When a spouse enters into divorce negotiations, the advice of an attorney about tax-related problems may be beneficial. The attorney may provide insight into ways to protect oneself from financial problems after the divorce.

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Bowen Ten Cardani, PC

Richmond Office
3957 Westerre Parkway
Suite 105
Richmond, VA 23233

Toll Free: 866-601-7371
Phone: 804-767-6850
Richmond Office Location

Ashland Office
9410 Atlee Commerce Blvd
Suite 2
Ashland, VA 23005

Toll Free: 866-601-7371
Phone: 804-767-6850
Ashland Office Location

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