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Divorce can have an impact on a person’s finances

On Behalf of | Jul 3, 2018 | Divorce

When beginning divorce proceedings in Kentucky, there are a number of issues that a former couple may want to consider. With the change in the tax law code coming into effect in 2019, finances could be affected in many ways.

For example, tax deductions will be capped to just $10,000 per year for state or local taxes. This can make it far more expensive to maintain ownership of the family home. If finances will be tight after the divorce, it may be beneficial for the former couple to sell the family home and either downsize or rent. For those who are over the age of 62, a reverse mortgage may be available to allow each person to purchase a new home with reduced mortgage payments.

Furthermore, the new federal tax code eliminates personal exemption deductions. These deductions have been replaced with a child tax credit, which will reduce an individual’s tax burden based on their income. As such, it should be determined which parent will be able to claim the children on their tax return.

If a former couple has been married for years, has obtained numerous marital assets or has children, going through a divorce can be complicated. Because the divorce laws and associated tax laws can be difficult to understand, some former couples may resort to their emotions when it comes to making decisions. A family law attorney may help a client create a plan that can help them get through the divorce and be able to move on without struggling. This may include determining if the client will be able to afford keeping the family home.