League City Family Law Blog

Tax season may raise some questions for Texans going through a divorce, especially parents of dependent children. Claiming a child as a dependent on a tax return can offer significant financial benefits. However, only one person can claim each child as a dependent at any given time. When parents do not reach an agreement among themselves about how to handle taxation, the results can be complex and challenging.

Claiming a child as a dependent is perhaps more financially important than ever. The claiming parent can file with Head of Household status and access several valuable tax credits, including the Child Tax Credit, Child and Dependent Care Tax Credit and Earned Income Tax Credit. All of these credits vary in amount depending on the number of dependents claimed. While the Tax Cuts and Jobs Act removed many personal deductions from income taxes moving forward, these credits remained important. Indeed, the Child Tax Credit doubled under the new tax law.

Divorce is an arduous process that can bring out the worst in people. During a divorce, people who loved each other once can sometimes act as if they are bitter enemies, trying to hurt the other person at every turn. As a result, it is important for people going through divorce to make the process be as amicable as possible.

To begin with, couples trying to imagine what kind of problems could show up during the divorce can look at the history of their marriage for guidance. They should try to answer questions such as how they resolved their conflicts and how each person handles hostile scenarios.

Even with stats showing that about half of all marriages eventually come to an end, most couples walking down the aisle in Texas have visions of a lifetime together. Still, there are times when some life partners begin to explore the possibility of permanently separating. While there are certainly valid reasons for ending a marriage, there are also some equally valid financial reasons why couples may want to give divorce a second thought.

First of all, there are the professional costs associated with getting a divorce. In addition to legal fees, such expenses may include costs to hire real estate agents, financial planners and other ancillary professionals. Some ex-spouses also seek help from therapists to deal with the emotional toll of ending a marriage.

Saying goodbye to an ex in Texas doesn't mean credit card debt automatically disappears. In fact, credit card companies typically have a legal right to make efforts to collect debt owed by both spouses following a divorce. This is why it's widely recommended that newly divorced individuals make an effort to leave a marriage free of debt obligations. Plus, having lingering marital debt opens an ex up to the possibility of attempts by creditors to obtain what's owed should a former spouse file for bankruptcy or fail to make scheduled payments.

Credit card debt incurred prior to a divorce is usually the responsibility of both parties as long as they were both co-signers. However, if the other spouse was only a joint cardholder but not a co-signer, they are normally not responsible for the debt. One possible exception is in states - like Texas - where community property laws apply. After separation, any further debt incurred on cards is the responsibility of the individual making the charges. Since the date of legal separation varies by state, soon-to-be-divorced spouses are encouraged to keep accurate records of credit card activity.