How the Tax Changes May Affect Your Credits
Posted by Carlie Berke, CDFA®
May 17, 2019
Three Important Considerations Related to the Marital Home and Child Tax Credits in Your Divorce as a Result of the Tax Cuts and Jobs Act (TCJA).
1. Good News! If you are keeping the house in a divorce and your mortgage was in place before December 31, 2017, then if you refinance the mortgage to get your spouse’s name off the mortgage, then you can still deduct interest on a mortgage of up to $1mm instead of the new limitation of $750,000.
2. If the custodial parent is going to give the child credits to the non-custodial parent, it is recommended to get the IRS Form 8332 signed at the time you are signing your marriage settlement agreement. Then it is taken care of when you go to file your taxes.
3. If you are keeping the house in a divorce, be sure to obtain all the records related to purchase, mortgages, costs of improvements and any other documentation related to the house. This may come in handy in a future sale and you have to support tax related items.
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You may need to work with a team of people willing to help you as you navigate the many many transitions that your divorce will require.
Try to be the best co-parent you can be for the best interests of your children, especially during the holiday season.
Credit is something often overlooked and needs to be protected in a divorce.
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