Divorce and separation come with complex tax considerations, from filing status and asset division to the treatment of alimony and child support, which can affect your tax bill and future financial planning.  In this guide, we will cover:

  • The effect of marital status changes on tax responsibilities
  • Key tax considerations during and after separation or divorce
  • Planning for tax changes throughout the divorce process

Changes to Filing Status

  • Determining Your Filing Status in the Year of Separation or Divorce
  • Special Rules for Head of Household Status Post-Divorce

Division of Assets and Tax

  • Tax-Free Transfers of Property
    • Understanding IRS Section 1041 rules
  • Selling Joint Assets
    • Capital gains considerations
    • Splitting the cost basis and sale proceeds

Alimony and Child Support

  • Tax Treatment of Alimony Payments Post-2019 Divorce Agreements
    • Differences before and after the Tax Cuts and Jobs Act
  • Child Support Payments
    • Non-deductibility and non-taxability of child support

Retirement Plans and Taxes

  • Dividing Retirement Accounts
    • Qualified Domestic Relations Orders (QDROs)
    • Tax implications and rollovers
  • IRAs and Divorce
    • Rules for splitting IRA assets

Tax Credits and Dependents

  • Claiming Children as Dependents
    • Eligibility and tie-breaker rules
  • Child Tax Credit and Additional Child Tax Credit
    • Qualifications and claiming post-divorce

Legal Fees and Tax Advice

  • Deductibility of Legal Fees Related to Divorce
    • Tax reform changes to the deductibility of legal expenses
  • Obtaining Tax Advice During Divorce
    • The importance and potential tax benefits

Final Thoughts

  • Checklist for tax tasks when divorcing
  • IRS resources and publications for separated or divorced individuals
  • When to seek professional tax guidance


Detailed Bullet Points for the IRS Sections:

  • IRS References:
    1. Filing Status Issues: IRS Publication 504
    2. Property Settlements: IRS Publication 504 and IRS Code Section 1041
    3. Alimony and Separation Agreements: IRS Publication 504
    4. Tax Information for Retirement Plans: IRS Publication 575 and IRS Topic No. 410 for Pensions and Annuities, or IRS Publication 590-B for IRAs
    5. Claiming Dependents: IRS Publication 501
    6. Child Tax Credit: IRS Publication 972