We’ve heard about the “death tax,” the sales tax, and income tax. But what about the divorce tax? Our Washington County family lawyers know that there is a cost to divorce. Between the filing fees, attorney’s fees, new place to live, and new household costs, the financial outlays add up, not even taking into account the higher emotional costs. There is also talk of the “marriage penalty” for tax purposes, by which two income couples are forced to pay higher taxes on their higher incomes, then they would if they were filing their taxes separately.
By contrast, in Russia divorce may be about to become even more expensive. According to Forbes magazine, a divorce tax is about to be imposed, and not just something similar to the “marriage penalty.” The Russian government is debating whether to increase the divorce tax, from about $14 US to almost $1000. The reason behind this measure is two-fold: raising revenue and making divorce less desirable. This may work because the proposed tax is more than the average Russian monthly income.
This measure, although it will certainly be unpopular, will go a long way towards plugging the hole in the Russian deficit, which will hit $20.4 billion US by 2014. This measure has the potential to put an annual $595 million US back into the treasury, spurred by Russia’s high divorce rate of 54%.
Russia’s legislature is justifying this move based on the desirability of a two-parent, one man-one woman home as being the best for children. Taxing divorce, and therefore making divorce less desirable and/or financially realistic, is believed by the parliament to lead to a better life.
Divorce in the U.S. is not taxed by itself, however certain aspects of the divorce process have some important and significant tax implications. For example, alimony is tax deductible by the payor and must be included in taxable income by the payee, child support is not taxable or deductible, and sales of marital property to third parties are taxed. It is important to take these tax considerations into account when proceeding with your divorce proceedings. Our experienced team of Washington divorce attorneys are educated about the possible tax effects of your divorce strategy. Contact our team today!