Mid Year Divorce

[DivorceDeath]

What is the name of your state? Nevada

Spouse makes 19k/yr, I make 84k/yr.............we're separated but not legally established. Spouse is getting 1/2 of my income and keeping all her income, not a problem for me at all.

When we file taxes after getting divorced in 2018, will she legally be responsible for the taxes earned on 1/2 of my income that she received? It could work both ways if I have to file with 100% income coming to me. If there is a refund, is half hers? If there are taxes due, is she responsible for half?

After the divorce a portion of my income (retirement) will go to her along with tax liability. My question is about 2018 income prior to divorce.

 

[justalayman]

how is she receiving 1/2 of your pay? If you get paid and then transfer half to her you are liable for the taxes on all of your income and she for hers.

When you file your tax return each will pay or recieve the under or over payment of taxes throughout the year attributable to their own income.

 

[HRZ]

The tax law for alimony does a 180 at end of 2018 ..and if your divorce order is entered in 2019 YOU will be stuck taxed on payments to her ....taxes matter a lot and you might be better off to get things done in 2018 before YE..

Prior to divorce you are entitled to file a joint return if you so agree. ...if you file separately that's ok ..but you each pay on you own income ..i.e. You get no credit for sums paid to her .

BTW...you seem to be paying a lot too much in my view ..go get some serious legal advice

 

[DivorceDeath]

how is she receiving 1/2 of your pay? If you get paid and then transfer half to her you are liable for the taxes on all of your income and she for hers.

When you file your tax return each will pay or recieve the under or over payment of taxes throughout the year attributable to their own income.

My retirement check goes into our joint account. We each transfer an equal amount out to private accounts leaving a couple thousand in joint each month. The joint account pays tax, insurance (house is paid off), utilities, car insurance & plates, phones, separate rent we each spent time in rental and owned house (it just sold).

So, retirement money is under my name but she is getting half. Seems I alone would be liable to pay additional taxes if due?

My question is if there is anyway she could show receiving half of retirement on her taxes even though there is no court order. I’m guessing no.

 

[HRZ]

With a court order delivered to retirement plan administrator splitting retirement say 50/50 then once split by QDRO or applicable tool if it's state or federal plan, then her portion is taxed to her.

If you remain officially married the you pay on all you income one way or another ...generally it's more tax efficient to file jointly

 

[LdiJ]

With a court order delivered to retirement plan administrator splitting retirement say 50/50 then once split by QDRO or applicable tool if it's state or federal plan, then her portion is taxed to her.

If you remain officially married the you pay on all you income one way or another ...generally it's more tax efficient to file jointly

Yes, but do remember that unless you are still married as of 12/31/2018 you CANNOT file a joint return, and if you are ARE still married on 12/31/2018 you will not be able to deduct alimony/spousal support. So those too issues are contradictory.

 

[HRZ]

Agree.....but division of pension is not alimony....OP needs some more financial /tax homework

 

[LdiJ]

Agree.....but division of pension is not alimony....OP needs some more financial /tax homework

It could be alimony/spousal support if the pension is not actually divisible.

 

[FlyingRon]

I disagree. Unless the court calls it alimony/support, it IS NOT. If we are talking an asset distribution and the court says the pension is split, then it is split (the law provides for this). If they decide that the party keeps his pension in lieu of giving up some other asset, then that asset goes to the other party and it's still not alimony.

The only way it would be alimony is if the court says the spouse will make alimony payments in lieu of giving up the pension. Can't imagine that happening in most states I know about (albeit, I'm not familiar with Nevada).

You're going to explain to me what you mean.

 

[LdiJ]

I disagree. Unless the court calls it alimony/support, it IS NOT. If we are talking an asset distribution and the court says the pension is split, then it is split (the law provides for this). If they decide that the party keeps his pension in lieu of giving up some other asset, then that asset goes to the other party and it's still not alimony.

The only way it would be alimony is if the court says the spouse will make alimony payments in lieu of giving up the pension. Can't imagine that happening in most states I know about (albeit, I'm not familiar with Nevada).

You're going to explain to me what you mean.

Maybe I should have said that it "could" be alimony/spousal support. Some pensions cannot be divided, therefore the person receiving the pension must pay the other party. Therefore in many instances that has been defined in the court orders as alimony or spousal support so that each party is paying their own taxes on the money, and the payer isn't getting stuck with the whole tax burden.

That will not be a solution to the problem after 12/31/2018 of course.

 

[FlyingRon]

What pension can't be divided? With a QDRO the pension can indeed be split (in fact, cashed out even if the plan doesn't permit it).

 

[justalayman]

What pension can't be divided? With a QDRO the pension can indeed be split (in fact, cashed out even if the plan doesn't permit it).

It would appear the op is already receiving their retirement payments (I didn’t see a description of exactly where his retirement pay is coming from. I could see a pension or any retirement account being referred to as “retirement pay” by some people.)

Do pensions allow for changes past the time of starting payout?

 

[FlyingRon]

Do pensions allow for changes past the time of starting payout?

In a QDRO that awards some portion to the spouse of the retiree, then yes, it is required by law (regardless of what the stated plan rules are).

There was a furor a while back when a bunch of Continental Airlines pilots "legally" divorced their wives to get out of the perceived failing pension plan. The airline countered that they were using the "paper" divorce to game the system. The federal courts upheld that a legal divorce is a legal divorce. The federal law on the QDRO trumps the plan language.

 

[LdiJ]

What pension can't be divided? With a QDRO the pension can indeed be split (in fact, cashed out even if the plan doesn't permit it).

No, a QDRO cannot do that with some pensions. Some pensions are a monthly entitlement that lasts only as long as the retiree is alive. There is no fixed amount of benefit other than the monthly benefit. Some pensions cannot even divide the monthly benefit, let alone be cashed out.

 

[LdiJ]

In a QDRO that awards some portion to the spouse of the retiree, then yes, it is required by law (regardless of what the stated plan rules are).

There was a furor a while back when a bunch of Continental Airlines pilots "legally" divorced their wives to get out of the perceived failing pension plan. The airline countered that they were using the "paper" divorce to game the system. The federal courts upheld that a legal divorce is a legal divorce. The federal law on the QDRO trumps the plan language.

Just because the Continental Airlines pension allowed for a division of pension in a divorce does NOT mean that all pensions allow for that.