How Does Getting Divorced Affect Your Taxes?
How Does Getting Divorced Affect Your Taxes? Getting divorced can have a significant impact on your taxes. Here are some key things to consider: Your Filing Status If your divorce is finalized on or before December 31 of the tax year, you will be considered divorced for the entire year and must file your taxes accordingly. This means that if you were previously filing jointly with your spouse, you would now need to file as a single or head-of-household taxpayer. Your filing status can significantly impact your taxes, as single taxpayers generally have a higher tax rate and a smaller standard deduction than married couples who file jointly. Your Divorce Settlement If you and your ex-spouse agree to split your assets and liabilities, this can also affect your taxes. For example, if you were awarded a portion of your ex-spouse's 401(k) plan in the divorce, you may be subject to taxes on the distributions you receive from that plan. Minimizing The Impact To minimize the impact of your ...