My firm specializes in the income tax and financial implications of divorce.
If you are in any stage of a divorce, and have not sought the advice of a seasoned financial planner and a CPA, I urge you to do so now. I have many financial advisers in my professional circles, so please reach out to me so I can recommend one.
This advice goes especially to anyone paying or receiving alimony.
Alimony is defined as a temporary payment to help the non-working spouse or under-employed spouse to create or rebuild a career, so that they may provide for themselves at a level of living in which they have become accustomed to.
Most times today, as opposed to decades ago, alimony is TEMPORARY and will eventually terminate. Quite often a monthly alimony figure is a substantial component of income for the recipient. So, planning for the termination of alimony is a crucial step that too few people take.
This is a tragic, and sometimes, life-altering mistake. As I said above, all parties to a divorce need to seek the advice of a financial adviser and an income tax expert.
As an aside, these should be two different people. I don’t believe it is possible to maintain two professions full time and still perform adequately for your clients and in their best interest. So just as an expert plumber cannot also be an expert electrician, your tax preparer cannot also be an expert financial adviser. It is impossible. If your tax preparer and financial adviser are the same person, I urge you to change this arrangement.
Back to Alimony
Alimony is a tool to help pay some bills while the receiver looks for, and procures, a better job or vocation. This then allows them to survive without alimony, so when it stops, you’re financially ready.
The alimony recipient’s main goal should be getting to financial independence where they don’t have to rely on that alimony, even though they are still receiving it.
Alimony should not be seen as a paycheck, but an investment into the recipient’s future. Of course in any divorce there may be immediate financial needs that alimony needs to be used for. But once that initial transition passes, executing a sound financial plan should be the priority.
In my opinion, payers and recipients of alimony at any level should be mandated to meet with a financial planner of their choice to review their “new wealth”, and to appropriately allocate it, so as not to become reliant on it. And also to meet with a CPA, to discuss the tax ramifications.
Alimony sets up many for future financial failure, but it doesn’t have to!
Remember, I have seasoned financial advisers who are also divorce specialists here to help you now and in the future.
Click here to request a consultation or ask me a question.
Please reach out to me without hesitation with any tax, business or accounting question, and to schedule a consultation.
Tax Laws are complex.
It is very easy to make mistakes that can incur penalties.
Do you have a Tax, Accounting or Business Question?
Is your CPA or Attorney ignoring you?
Call Me Immediately. (732) 673-0510.
Remember,
“If We Aren’t Working For You, Then You Aren’t Working At Your Best”
Chris Whalen, CPA
(732) 673-0510
79 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com
#Divorce #taxes #cpa #irs
