Florida residents may have been on the edge of their seats waiting for the fiscal cliff resolution, but some wealthy couples may be surprised when they file their tax returns. Although the resolution was touted as a way to avoid another recession, the deal will increase taxes on couples making over $450,000 per year. Some affected couples may now be heading for a high asset divorce, not because of marital trouble, but to save money because of the effect of the new law.
There may be initial surprise when a high asset divorce results because of taxes, but one couple who chose to go through a divorce never planned to separate. They reportedly only sought to avoid the almost $30,000 in additional income taxes they would have to pay if they stayed together. Each spouse is an investment banker, and each brings in an income enviable to many. With the past tax breaks, they enjoyed the fruits of their labors.
However, a talk with their accountant resulted in some sobering news. To avoid the huge tax hike, they would need to get divorced and file in a single status. Otherwise, they may just have to grin and bear the new law and pay the money. The couple chose to divorce and reportedly ended up saving a bundle of money.
The fiscal cliff deal may have relieved the vast majority of the nation from the tax increases, but wealthy couples are now bearing the brunt. A high asset divorce is not the best option for everyone, but for some it could save them quite a bit of money. Florida couples in a situation like this, considering the money saving tactic of divorce may want to research their options before taking such a permanent step.
Source: The Fiscal Times, "For High Income Earners, Time for a Tax Divorce," Jacqueline Leo, Jan. 4, 2013