The process of getting divorced in Massachusetts can understandably be overwhelming both emotionally and financially. After all, it involves several moving parts that have potentially long-lasting impacts. Here is a glimpse at how divorce can impact a person’s retirement, taxes and financial status in 2018.
First, divorce can have an impact on a person’s investing efforts — but in a good way. Following divorce, people may enter lower tax brackets. This may be advantageous if they can qualify for a capital gains tax rate of zero percent, which may make investing much more rewarding and affordable for them.
However, holding onto the family home may not be the best move for some divorcing spouses under the brand-new tax law. Often, one spouse chooses to retain the family home following a divorce, but this may become less enticing in Massachusetts and other states known for having high taxes. On the flip side, child tax credits are temporarily replacing personal exemption deductions in the Internal Revenue Code, and this is generally good news because credits carry more value than deductions do. Of course, in light of this change, determining which spouse gets to claim a child following divorce is more critical now than ever before.
When it comes to finances, it is best if two divorcing spouses in Massachusetts can resolve their differences regarding matters such as property division and alimony outside of court. This will prevent them from having to go through traditional divorce litigation, which can be costlier and more stressful. Either way, an attorney can help a spouse who is going through divorce to pursue the most personally favorable outcome given the circumstances surrounding the end of the marriage.