I have tax issues due to complicated divorce. Do I need a CPA or a Tax Attorney?

Are you saying you are in the state of Virginia?

Are you legally divorced now?

I don't see a tax issue except for who gets to claim the kids. Legally they are hers to claim unless you have it in the order otherwise. It is a crappy situation but the law is very, very clear on this.

That whole situation seems messed up. Why are you paying her bills, for the kids, etc. and then she gets to (insists on?) claiming them as her dependents???

Consult a CPA not a tax attorney. Married separate is better than single. Head of household might apply

Fight for at least 2 of the 4 kids as dependents on your tax return. It doesn't matter that they lived the majority with her. They're still your kids.

You should look up the stats for Head of Household in terms of the total support you're providing. You may be providing well over half of their support even though they live with you less than half the time. Why not take your kids half the time?

Also, make sure you even out the ones old enough to qualify you for the tax credit. You need to stop paying her bills and instead negotiate alimony, if indeed you have to pay it. It's tax deductible and child support is not.

the time for a tax attorney was prior to finalizing the separation agreement.

now you can probably achieve the same tax result with turbotax as you can with a CPA or tax attorney.

Clarification to the child tax credit comment - If your kids are all 17 or younger, then no problem. Once they turn 18, they're no longer eligible for the tax credit.

The divorce lawyer should be helping with the negotiation of the settlement agreement...for year 1, CPA over Turbo Tax

Guys, There is no agreement. She wouldnt agree to anything-the house is a whole separate issue.

The judge (in Virginia) simply ordered the separation in Oct. until..

Final decree is Feb 24.

I paid the bills sans separation agreement cause my kids have to have a home. I never was legally obligated to pay a dime, but the judge sure wouldnt like that. All per attorneys advice.

I paid bills up to 3000/mo before the judge told me to pay 1200 CS and 1000 to the mortgage.

At minimum she gets 2200/mo from me. she clears 1000/mo at most, 200 mo minimum as teacher sub. The kids would have no home or food without me.

Don Draper wrote:

Guys, There is no agreement. She wouldnt agree to anything-the house is a whole separate issue.

The judge (in Virginia) simply ordered the separation in Oct. until..

Final decree is Feb 24.

I paid the bills sans separation agreement cause my kids have to have a home. I never was legally obligated to pay a dime, but the judge sure wouldnt like that. All per attorneys advice.

I paid bills up to 3000/mo before the judge told me to pay 1200 CS and 1000 to the mortgage.

At minimum she gets 2200/mo from me. she clears 1000/mo at most, 200 mo minimum as teacher sub. The kids would have no home or food without me.

You have an attorney, right? You really should be more aware of the consequences of various orders and possibilities.

Unless there is something in the final order then she will get to claim the kids. All of the kids. For 2010 and subsequent years. I am reading your original message as saying they lived with her all year and will live with her the majority of the time in the future. Your attorney will need to ask the judge to have you have the right to the deduction or at least to split the deductions. You may be able to get this with a reasonable judge, but there are no guarantees.

You can file married, or married filing separately for 2010. You can only file married if it is something you will both agree to but it is usually the best way for both of you. Being she hasn't been agreeable to anything else, there is no reason to think she will be here. Head of Household is not a possibility unless a child lives with you more than 50% of the time.

The house is an issue in that you should be entitled to claim the mortgage interest deduction for 2010 if you paid the mortgage.

You will have a hard time knowing what you can claim until after the Feb. hearing. I think you can only come out better by waiting until after that date--i.e. I see little downside to waiting.

The issues really aren't that complicated as far as filling out the tax paperwork. Turbotax can do all of that, but you may want to use a tax professional for peace of mind.

Lastly, you are a fvcking idiot for even thinking of getting married again. Losing 50% one time wasn't enough? Also, listen to your attorney, not jerk-offs from the internet.

Go back to your divorce lawyer and ask for a referral. He is most informed of your circumstances and should be able to refer you to the right pro.

to answer your question: you should probably hire both, although I could probably guide you thru all of it at no cost to you.

Do not, I repeat, do not get remarried.Why would you get remarried when all of this isn't settled yet? If you disagree, then you better have a pre-nup.

Imho, you have paid way above and beyond for the x2b. You need to get a settlement with credits back to you.

If you are a business person, think of this as a financial deal because that is what the court will do. It is an asset/debt deal. The kids will be another deal with a Parenting Plan.

Listen to your attorney but question everything and ask for case law on something you are strongly opposed to.

The possibility exists that you will spend tens of thousands of dollars on attorney an other expert fees. Make sure you have you x2b evaluated for a employment so that, if she isn't currently working, you can have her imputed income for alimony.

There is so much more to tell you but it is difficult to do here.

If you are serious, you can contact me at

turtleww@yahoo.com

Best wishes,

It's called a settlement agreement. I have my kids less than half the time and get 2 of them as exemptions. I also negotiated to pay alimony for 4 years rather than 7, got half the equity in my house and half the 401k - despite the fact that I have 80% of the combined income. If she's intractable and refuses to even try to negotiate, the lawyer should be able to use that against her.

Your ex can claim the kids if she wants and if she is set on doing that, then yes you are screwed and no CPA or attorney is going to really help you.

However, because of the support you provided there is an avenue opened where your ex could sign a written agreement that says you can take one or more of your dependents and that she will not claim them.

It is best to put differences aside and arrange to have a tax accountant look at both of your returns. They can see what provides the best net benefit between both of you. Then hopefully whoever of you gets the benefits of all the credits and deductions for claiming the kids can reimburse the other.

But of course its all too common for divorced couples to take the scorched earth policy on these matters.

if your divorce attorney is not familiar with the tax issues here, you need a tax attorney prior to the settlement agreement.

with your wife's income being so low, even including potential alimony payments, the children's exemption amounts would have much more dollar value to you. the child tax credits might too, though that is less clear.

even if your wife has generally been unreasonable in negotiation, these points shouldn't be complicated or even contentious. basically the two of you together will have an estimated amount of income (say, $100,000 for the sake of discussion). if you settle the division of exemption amounts for your children a certain way - giving them to you - the federal government will take, say, $25,000 of combined tax from the two of you. if your wife gets them, you will pay more, say, $28,000, in combined tax.

point being, the two of you are effectively dividing a pie of post-tax income. you should both want that pie to be as large as possible regardless of how it is ultimately divided.

(it should be a similar story for child support vs alimony payment)

(again, if your divorce lawyer can't handle this tax math, and the related negotiation / persuasion, you are not being well represented)

Unless the wife wants revenge and wants to hurt him in the pocket book as much as possible. I think some former spouses really do see the benefits of taking the high road, and deliberately take the low road because they want to.

kaitainen wrote:

point being, the two of you are effectively dividing a pie of post-tax income. you should both want that pie to be as large as possible regardless of how it is ultimately divided.

(it should be a similar story for child support vs alimony payment)

(again, if your divorce lawyer can't handle this tax math, and the related negotiation / persuasion, you are not being well represented)

right. and i should have read your post before writing mine.

Been through this mess wrote:

It's called a settlement agreement. I have my kids less than half the time and get 2 of them as exemptions. .

The O.P. does not have a settlement agreement or a final order. You are right, if the parties agree or the judge orders it, then either party can claim the children as dependents (or they can alternate). I was merely stating that as a matter or law, in the absence of a settlement agreement or final order, the person who has the kids more than 50% of the time is entitled to the exemption.

In the absence of an order or agreement IRS publication 501 spells out who can claim the children. It is under the heading of Children of Divorced or Separated Parents:

http://www.irs.gov/pub/irs-pdf/p501.pdf

O.P.---you should be able to deduct a lot of what you paid for the house as Alimony. This is a deduction for you and taxable income for her.

These are not really terribly difficult tax problems but given your likely emotional state and the newness of all of this I would seek a tax professional to help you this year. Look at what he does and you should be able to do this with Turbo Tax next year.

Tax attroney or CPA?! I say Shrink. Make your wife let you claim one kid (so you can claim head of household) and then offer her some of the resulting money you'll get because of it. Who can resist EVEN more money? I worked shit like that out with my ex all the time when my kids were still underage. Even though we were divorced, we worked EVERY angle with the government like frickin' pro's and split the booty. I'll give my ex that much - she didn't let a little hatred get in the way of gouging the government with every trick we could. YeahBaby!