Freelancers and independent contractors make up a growing segment of the working population. Why, then, does the bulk of divorce-related financial advice target “traditional” employees? It's high time we offer advice where it's most needed.
If you file 1099s instead of W-2s, you need to know exactly how your official change in relationship status will impact not only that dreaded tax return, but also your health insurance coverage, retirement savings, and chances of scoring custody. Follow these suggestions to ease the burden:
Health Insurance
Employer-sponsored health insurance was arguably the greatest perk of marrying a 9-to-5 employee. Coverage will end alongside your marriage, so prepare for horrific premiums and deductibles.
If your spouse is game, an alternate option exists: separating and hanging on to your insurance coverage. Georgia law does not recognize legal separation, but does allow for separate maintenance. Otherwise, you can include the cost of insurance in your settlement or temporarily retain coverage through COBRA.
Tax Filing Considerations
Struggling to determine who should keep shared property after divorce? In all likelihood, your marital home will benefit you more — especially if you have a sizable home office. The loss of your home office deduction could prove a huge blow come tax season.
Your divorce timeline may prove surprisingly influential in light of the new tax bill and its treatment of pass-through entities. Work with an experienced attorney to determine the best possible timing — and consider pursuing creative solutions through mediation.
Evaluating Income for Alimony and Child Support
As a freelancer, your income varies considerably from one month to the next. If you're the higher earner in the relationship, however, you may be required to pay alimony. This seems unfair, as you lack health insurance, 401(k) matching, and other benefits your supposedly lower-earning spouse enjoys. Furthermore, income variability makes your monthly obligation uniquely difficult to calculate. If possible, consider a lump sum approach; this may ease the burden during lean periods.
Child Custody and Visitation
Like all freelancers, you're familiar (and disgusted) with a common stereotype: self-employed workers enjoy vast expanses of free time. In reality, you work long but irregular hours. Unfortunately, a judge may regard your varied workload with suspicion. Combat this bias by showing that you can stick to a strict visitation schedule — and that retaining custody would be in your child's best interests. This may mean developing a routine where none exists.
Whether you work a traditional, full-time job, own a small business, or are fully invested in the gig economy, you deserve legal support from somebody who understands the intricacies of your profession. Our team at DiPietro Law Group, PLLC has considerable experience working with freelancers and small business owners. Reach out to learn more about our Georgia law firm's personalized approach.
To contact an Atlanta, GA divorce attorney at our office, call (888) 530-4374 or fill out an online contact form here.