The Real Cost of a Divorce

By Carla Fried - 2013-11-25T13:43:42Z

Photograph by Steven Ahlgren/Gallery Stock

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Work Out the Taxes

If both parties have similar salaries, divorcing could drop each into a lower federal tax bracket as individuals. (Yep, the marriage penalty undone.) Other tax issues can “cost” one party. If there are minor children, the parent with custody gets first dibs on claiming the $3,900 child dependent exemption, or the custodial parent can choose to give the exemption to the other parent as part of the settlement. There’s also a $1,000 child tax credit to the custodial parent; that dollar-for-dollar reduction in taxable income begins to phase out for single filers with adjusted gross income of more than $75,000.

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