Divorce and Taxes Part II – Child Support, Alimony, and Taxes

The certainties of death and taxes are inescapable, as is the certainty that divorce will change your tax situation. If you’re getting divorced, you may need to think about child support, alimony, and taxes – along with other tax issues.

In this series we look at some of the key issues surrounding divorce and taxes, so you can gain the clarity you need to have informed conversations with your attorney and your CPA. That can be important to help them protect your interests.

Last time in the series, we discussed four things to consider when mediating or negotiating your divorce decree. When it comes to our topic for this installment – child support, alimony, and taxes – you may find some surprises.

Child support and taxes 

If you receive child support, you don’t have to report it as income.

If you pay child support, you don’t get to deduct it on your taxes… and you don’t get to claim the child on your taxes just because you pay support. The parent who gets to take the dependency exemption for the child depends upon your Divorce Decree, temporary order, and/or the tax code.

Alimony and taxes – a different animal

Alimony (spousal support) is altogether different than child support when it comes to tax rules. If you receive alimony, you have to report it on your taxes as income. If you pay alimony, your spousal support payments are tax deductible.

Getting slick with spousal support and taxes – a sticking point for the IRS

If your decree structures alimony payments to be high in the first couple of years and then drop off, the IRS may consider those payments to be a property settlement rather than alimony and you may not be able to deduct them.

Know your decree

Be mindful of child and spousal support tax implications when you’re negotiating or mediating your decree – including who will claim exemptions for the children.

 

A word about backsies

If you reach an agreement and a temporary order or final decree is entered, but your spouse changes their mind later, you may want to file your taxes before your spouse. That is unless you need them to sign IRS Form 8332 and they refuse. If that happens, talk to an experienced attorney about enforcement options as soon as you can.

If you don’t need your spouse to sign Form 8332, and they tell you they’re taking the dependency exemption when they aren’t entitled, you may come out ahead if you file first because the IRS will credit the first person who files and claims the exemption.

For more on filing child support and taxes and alimony and taxes, see IRS publication 504.

Next in the series

Next time in the series we look at things to think about when negotiating the property settlement agreement in your divorce.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


Author, Hightower Reff  Partner Attorney Tracy Hightower, holds both a Juris Doctor and  a Master of Laws in Taxation. For more about Tracy, visit her profile page.

If you need help with an Omaha area divorce or other Omaha family law case, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office. 

Changing Child Custody or Support Your Holiday Wish? 4 Things You Should Know (Infographic)

holiday-modification-mediumFrustrations over repeated problems can be a bigger deal during the holidays. That can be a pain, but it can also be a benefit in the long run because it can make clear to you things that need to change. Sometimes those things include child custody or child support orders that aren’t working for your family anymore. If changing child custody or support is your holiday wish, there are 4 things you should know:

 

In a Nebraska child support modification, if a parent is looking to reduce the child support they owe because their income has gone down, the court will look at what caused their income decrease. The court will also look at whether the parent caused it on purpose.

Unfitness not a necessity for changing child custody

You don’t have to prove that the other parent is unfit for the judge to grant a custody modification. Showing that changing child custody is in the child’s best interests may get the job done. For example, the court may find that changing child custody is in the child’s best interests if the parent with primary custody is no longer giving the child a stable living environment.

The court’s decision will turn on the very specific, individual facts of your case, and the needs of your children. Your attorney’s skill in clearly and effectively showing the court those things is critical.

Experienced legal support is essential

Choosing the right attorney for a Nebraska child custody modification or Nebraska child support modification is crucial. It’s also crucial to your peace of mind during what can be a long court proceeding. Having an attorney in your corner you are confident in, who gives you clear information and who is committed to your case is key.

Also remember that experience goes a long way. When you choose your attorney for your child custody modification case or child support modification case, look for a lawyer who works daily in this specialized area of the law.

Look also for a lawyer who’s familiar with the judges in your area, and how they may view the facts of your case. While no attorney has a crystal ball, or can guarantee the outcome of a case, familiarity with “the bench” in the county where your case will be heard can help your attorney know how to approach your case in the most effective way.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Susan Reff, visit her profile page.

Find out more about how Hightower Reff can help with custody and support modification. 

If you need help with a child custody modification case, or a support modification case, contact Hightower Reff Law todayand come visit with one of the attorneys at the Omaha office. 

Nebraska Alimony – What you Need to Know (Infographic)

Nebraska Alimony - What you Need to KnowIf you’re thinking of divorce, you may also be wondering about Nebraska alimony (also known as spousal support).

Regardless of whether you think you may end up as the payor or the payee, you should know something about Nebraska alimony before you make decisions about your case.


Hightower Reff Law is a team of confident, clear, committed attorneys representing clients in the Omaha metro and surrounding areas in family law and criminal defense/dui.


The spousal support conversation is an important talk to have with an attorney who’s experienced in Nebraska family law. This article and infographic will give you some basics that will help you have a more productive conversation with that attorney.

In our many years practicing Nebraska family law in at Hightower Reff Law in Omaha, we’ve learned that the more information clients have, the more clear and confident they are about their case, and the decisions they make.

When it comes to Nebraska Alimony, there are some things you may be surprised to learn.

The alimony of yesteryear

If you’re a little older, and someone you knew many years ago divorced, you may have heard it mentioned that the husband was ordered to continue supporting the wife “in the manner to which she’s become accustomed.” That may be the way many courts approached alimony in days of yesteryear, but it’s not the way spousal support goes in Nebraska today.

The times they have a changed

In the majority of cases, Nebraska courts don’t award alimony. If they do, it’s for a short time – long enough for the spouse receiving support to get training or education or find a job. It’s sometimes called “rehabilitative spousal support.”

Nebraska courts usually consider several factors when deciding spousal support – as explained in the infographic below. The court also considers the relative economic circumstances of both parties in its alimony decisions.

 

 

In cases where there is child support, that will be determined first, and then the amount of spousal support will be decided based on each party’s income and expenses after child support is paid.

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Tracy Hightower, visit her profile page

Our additional resources on marital property division are available  here

If you need help with a Nebraska divorcecontact Hightower Reff Law today and come visit one of the attorneys at the Omaha office. 

Collaborative Divorce – A Truly Amicable Alternative (Infographic)

 

collaborative-divorce-hightower-reff-2At Hightower Reff Law, not only do we practice in traditional divorce, we also offer collaborative divorce – a truly amicable alternative.  Attorney Scott Hahn and I are among the relatively small number of Nebraska lawyers certified in collaborative divorce.

Why collaborative divorce is a truly amicable alternative

The traditional divorce process happens our adversarial court system. Despite the Nebraska court process mixing in alternative dispute resolution efforts like mediation – in the end, divorcing spouses often end up duking it out in court. Collaborative divorce offers something different.

Collaborative divorce can result in a better outcome for the family in the short and long term. This is especially true when children are involved, because the adults must continue co-parenting after the divorce. Bruised emotions and hard feelings from a bloody court battle can cause additional problems between the parents for years. That’s not good for the children.


Hightower Reff Law is a team of confident, clear, committed attorneys representing clients in the Omaha metro and surrounding areas in family law and criminal defense/dui.


How it works

In simplified terms, the collaborative divorce process involves you and your spouse working with a team of professionals to come up with an agreement for submission to the court to become a final order. You’ll need to have some court involvement to get everything finalized, but it will be brief and uncontested because you’ll have everything agreed upon ahead of time instead of “duking it out.”

Here’s an infographic with the nuts and bolts:

 

The collaborative process puts you in control

In traditional, litigation-centered divorce, unless you and your spouse reach agreement via mediation or negotiation, a judge has the decision making power. In collaborative divorce, you and your spouse control the process from the beginning and you have the power throughout the process.

I’ve been practicing divorce and family law for quite a few years. Through my experience I’ve learned that both spouses in a divorce are most satisfied with the outcome of their case when they’ve had input, instead of having the final order forced on them by a court.

When both sides are generally satisfied with the outcome of a case, both sides are more likely to comply with the final court order. That means it’ll be less likely they’ll have to keep dragging one another back to court to enforce that order.

These are some of the reasons I decided to become certified in collaborative divorce to better serve my clients – and why I believe so strongly in the process for the right cases.

 

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Partner Attorney Tracy Hightower, visit her profile page.

More information about Hightower Reff’s collaborative divorce practice is available here.

If you need help with a Nebraska divorce, contact Hightower Reff Law today and come visit with one of the attorneys at the Omaha office. 

Need to Change a Nebraska Custody or Child Support Order? 4 Things You Need to Know

4thingsaboutmodificationhrlawAt Hightower Reff Law in Omaha, Nebraska, we often meet with clients who come in confused about what to do when their parenting plan isn’t working for them anymore and they need to change a Nebraska child custody order or change a Nebraska child support order.

Sometimes when a child support or child custody decree that was entered in the past doesn’t work anymore, there is something you can do about it. In some cases, you can change or modify custody. It’s called — simply enough — a modification case.

1.  No Magic…but Some Musts 

There’s really no magic number of months or years to wait to try a change a Nebraska child custody order. However, to convince a court to modify a domestic relations order, your case has to meet some basic criteria:

  • The child domestic relations order has to be a final order (temporary orders can’t be modified)
  • There  material change in circumstances that:
  • happened after the entry of the original decree or any previous modification, and
  • was not contemplated when the decree or last order of modification was entered
  • If it’s an order of child support, Nebraska law considers a material change in financial circumstances to be:
    • One that results in a change of 10 percent or more, but not less than $25, upward or downward, of the current child support obligation, child care obligation, or health care obligation

and

2. The Why’s Matter 

If the parent’s income is lower when the original order was entered, the court will look at the reason for the reduction and whether it was in bad faith if the parent did it on purpose in a Nebraska child custody modification case. The biggest consideration, however, is best interests of the child.

In addition to financial issues, the court will also consider other circumstances of the parties or the child – like  health –  when it’s as a material change in circumstances for modifying Nebraska child support.

3. Other Orders/Issues that may be Able to be Modified:

  • parenting time
  • spousal support
  • removal of the child from the jurisdiction if a parent wants to relocate with the child

4. Orders From Elsewhere 

If  a court in another state entered the Nebraska child support order in question, you may be able to modify it in Nebraska.

That’s a question of jurisdiction that will need to be addressed after an in-depth consultation with an experienced attorney, like those at Hightower Reff Law, because whether you are likely to be successful in your attempt to change your Nebraska child support or child custody order can change in your based upon small changes in fact.

This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 


For details about the author, Hightower Reff  Attorney Scott Hahn, visit his profile page at our main website.

To learn about Hightower Reff’s Family Law Practice, visit our main website.

Looking for Alimony in Nebraska? You may Have Better Luck Finding a Hen’s Teeth

hen empty treasure chest and dog-thumb-250x250-72143If you’re getting divorced in Nebraska and looking for alimony, you may have better luck finding a hen’s teeth, or a flying pig… or any other idiom you choose.

No Hard and Fast Rules

Although there are no hard and fast rules, in most cases, Nebraska courts don’t award alimony – also known as spousal support. If they do, it’s usually for a short time – long enough for the spouse receiving support to get training or education or find a job sufficient to support themselves.

Any award of spousal support is up to the court’s discretion. When the court considers a request for spousal support, Nebraska law says the court is to base its decision on factors like:

  • the duration of the marriage
  • contributions of each party like care and education of the children, interruption of personal careers or educational opportunities; and
  • the ability of the spouse receiving spousal support to engage in gainful employment without interfering in the interests of any children in their custody
  • Other Considerations  

    The court also looks at the relative economic circumstances of both parties and other criteria in its decision.

    In cases where there is child support, that will be determined first, then the amount of alimony will be considered based on each party’s income and expenses after child support is paid.

    Nebraska law specifically states that the purpose of alimony is to provide for the continued maintenance or support of one party by the other when the relative economic circumstances and other criteria make it appropriate.

    Heard it Through the Grapevine 

    Nebraska case law has fleshed out that the most important consideration for the courts when determining alimony is fairness and reasonableness to be determined by the facts of each case. That means that you shouldn’t expect to win your request for alimony based upon the outcome of your friend’s case or another case you heard about through the grapevine.

    A court’s decision can change dramatically based upon a very small change in facts, and there is no way for you to know whether the facts of your friend’s case or that other case you heard about truly match up with yours.

    When it Could Last a Lifetime

    Spousal support is becoming increasingly rare in Nebraska, and permanent (lifetime) alimony is almost unheard of – except in the rarest of cases.

    Those cases usually involve factors such as:

  • Great disparity in income
  • Long term marriages with parties who are advanced in age
  • A party who has a physical or mental disability or health issues that prevent them from working or from working full time
  •  This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts. 

    What to Expect from Your Lawyer – The Bill. Five Tips for Controlling Your Legal Fees

    shutterstock_124994786-thumb-400x500-65288Lawyers can seem like they’re from a foreign land with their own strange customs and language. And, let’s face it, sometimes (okay, a lot of times) some lawyers seem unapproachable, which can make the client experience less than a good one.

    At Hightower Reff, we do our best to be approachable, be clear about our legal fees, and have a productive relationship with our clients. A big part of that productive relationship is helping our clients know what to expect in all areas of their cases so they can be realistic about their goals.

    In this series, What to Expect from Your Lawyer, Hightower Reff Partner Attorney Susan Reff will give you some useful information to help you understand why your lawyer handles things the way they do and to maintain reasonable expectations regarding your attorney and your case.

    This week: The Bill. Five tips for controlling your legal fees.

    1. Pick Your Battles

    We covered this in detail in the last artcle of this series, and it’s so important when it comes to controlling your legal fees, that it’s worth repeating.

    Money is an important form of “fuel” to help you reach your goals in life in many areas, including reaching your legal goals.

    If your lawyer charges by the hour or by the task, the more issues you choose to fight, the more hours it will take. The more hours it takes, the more money you spend. Unless your money fuel tank is unlimited, you have to decide where to focus your money fuel.

    If you spend it all fighting over things that really don’t matter in the end, you may find you don’t have any left for the issues in your case that truly matter to your life and your child’s. Pick your battles and put your money fuel where it counts.

    2. Practice Phone Efficiency 

    In an earlier article, we talked about what to expect from your lawyer regarding phone calls. Phone calls are a fast way to run up your bill. Remember: each time you call, you get a charge on your legal bill.

    Unless it’s something urgent or time sensitive, put off the call if the question can wait until the next time your lawyer calls you, or until you have more than one question. We recommend our clients make a list of these “little” questions that are bound pop up and ask them all at once.

    If you need regular reassuring from your attorney personally, and if your attorney is willing and able, you may want to schedule a weekly phone call with them when you’re in the active phases of your case. That way, you can have peace of mind by touching base at least once a week, and have your “little question list” ready to go for the weekly call.

    3.   Keep Your Eyes on the Prize

    When you talk to your lawyer, stick to the legal issues in your case. As compassionate as your attorney may be, and as much as they may care about your case, they are a counselor at law, not the kind for emotional or mental health support. In other words, your lawyer is qualified to give you legal advice, not emotional therapy.

    A licensed professional counselor can be an important support during stressful litigation. Their hourly rate is probably quite a bit lower than your attorney’s and may be covered by your health insurance. Legal fees are 100 percent out of your pocket.

    4. Know How Your Attorney’s Firm Bills  

    Attorneys can bill by the hour, by the task, with a flat fee or by a percentage of the money you recover. Aside from attorney fees, legal costs like depositions can add up. So you don’t have any surprises, find out up front your firm’s billing method and what costs your attorney expects may be involved in litigating your case.

    Also, if your lawyer bills by the hour, find out in what increments they bill. A lawyer who bills in a fifteen minute increment will end up costing you more than one who bills in a six minute increment. For example, at $275 an hour, a four minute phone call will cost you $27.50 at a firm that bills in six minute increments. The same phone call will cost you $68.75 if your firm charges in fifteen minute increments.

    5. Put It in Writing

    Signing a Contract for Legal Services with a law firm may seem daunting, but it’s as important for your protection as it is for the firm. The contract sets the rules between you and your lawyer on how your representation will be handled – including fees. Make sure you have a contract that includes clear language regarding the firm’s rates for the attorneys and support staff and the method of calculating your legal fees. Read it thoroughly before you sign.

    If there is ever a disagreement about how you’re being billed, a contract that is clear in its terms can be a good thing to refer to in deciding whether billing is happening according to your agreement with the firm.

    Next Time…

    Watch for Part IV of our series – unnecessary roughness in the practice of law and why it could mean a flag for your case.  

    Let Us Know if We Can Help 

    To find out more about Hightower Reff and how we can help, call us at 402-932-9550, or contact us online.

    This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts.