Government programs rolled out during the coronavirus pandemic may impact the divorce process for some individuals.
During the pandemic, the federal government provided financial assistance to businesses and individuals/families. As a business owner, you may have received a loan from the Paycheck Protection Program. As a taxpayer, you may have received stimulus checks. As a student loan debtor, you may have received a deferral from making your monthly payments. These and other government programs may affect your taxes, child support calculations, and division of liabilities during your divorce process in 2021. This article describes some of these programs and what to consider.
As the divorce process proceeds, you will be presented with options and action items. It is important to consider the tax costs/savings that result from such choices: from splitting financial accounts to claiming child tax credits. A certified divorce financial analyst could preview your options and provide guidance. This article describes some situations which may impact your taxes.
Divorce financial planning considers many factors for analyzing financial outcomes after divorce including income, spending, assets, liabilities and taxes. Especially important for older clients is knowing that they can cover their spending during retirement. This article explains some issues to consider during the divorce process.
There are some expenses like insurance, gym memberships, phone plans, and streaming services that are shared during the marriage. As the divorce process proceeds, you must take steps to remove yourself from joint accounts and establish them under your name to remove any personal or financial liability. Read this article for more ideas.
Using 401(k) assets to pay for expenses during the divorce process can be costly. If you are under 59 ½ years old, you may have to pay income tax and a 10% penalty on the withdrawal. It may be a better option to take a loan against the 401(k) up to maximum of $50,000. But before resorting to raiding any retirement funds, it would be best to consult with a financial professional such as a certified divorce financial analyst who can review your options. Read this article for more information.