Divorce and Tax Preparation: What You Need to Know
Divorce is never an easy process. Besides dealing with legal fees, you may also face tax preparation fees. Many spouses have approached me needing a tax return filed as part of their divorce case proceedings. However, these returns often come under scrutiny from the other party’s legal representation.
Clear Communication with Your CPA is Crucial
When filing a tax return for a divorce case, it’s essential to communicate clearly with your CPA about its intended use. Some CPAs may hesitate to get involved in legal disputes and might not provide follow-up support if questioned by the opposing party’s lawyer. Ensure that your CPA is willing and available to consult further if tax-related issues arise during the divorce.
Be Aware of Hourly Rates
Hourly rates for forensic accountants vary significantly based on location. For example, forensic accountants in New York and San Francisco may charge $400 per hour, while those in less expensive states like Florida may charge as low as $250 per hour. These rates can add up quickly, especially if reconciling numerous pages of financial records.
Essential Tips for Divorce-Related Tax Returns
- Married Filing Separately: Ensure you have your spouse’s name and date of birth.
- Child Dependency Claims: Only one parent can claim the child on their tax return. The parent who had the child for the majority of the year should claim the deduction.
Final Thoughts
Navigating taxes during a divorce case requires careful attention to detail and clear communication with your CPA. By understanding the potential challenges and costs, you can make informed decisions and avoid unnecessary complications. If you need assistance with tax preparation during your divorce, don’t hesitate to reach out. We’re here to help you through this difficult time.
