Money and property
Taxes during and after divorce
Filing status, children, the house and retirement all change. A few rules cover most cases.
Filing status
Your status is set by your marital status on December 31. If your divorce is final by then, you file as single or, if you qualify, head of household. If not, you file married jointly or separately.
Children
Generally the parent the child lives with more nights claims the child. That parent can release the claim to the other parent using IRS Form 8332. Decide this in your agreement.
Support payments
- Child support is never taxable or deductible.
- Alimony under divorces finalized after 2018 is not deductible and not taxable income federally.
Property transfers
Transfers between spouses as part of a divorce are generally tax free, but the person who keeps an asset also keeps its tax cost. A brokerage account with large gains is worth less after tax than the same amount in cash.
The home
When a home is sold, each owner who qualifies can exclude up to $250,000 of gain. Married couples filing jointly can exclude up to $500,000. Timing a sale around the divorce can matter.
A tax professional or divorce financial analyst can model these choices. They are worth an hour when the numbers are large.
This guide is general information, not legal advice. Laws differ by state and change over time. For advice about your situation, talk to a licensed attorney in your state.
More guides like this
More on money and property
Community property and equitable distribution
Nine states split marital property equally. The rest divide it fairly, which is not always equal.
Dividing retirement accounts and pensions
A decree is not enough. Most workplace plans need a separate court order, called a QDRO.
How child support is calculated
Every state uses a formula. Knowing which one yours uses tells you what numbers matter.
Ready when you are
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