There’s a lot going on in a divorce. You might be paying or receiving alimony and child support. The marital home, retirement funds, and businesses may be sold or transferred. It will be determined who gets what tax benefits for the children. Your tax filing status will change. Taxes affect every divorce. This chapter will view various divorce transactions from the tax point of view. You may use it as a checklist for tax issues in negotiations, settlement, and litigation.
Tax Filing Status
Your marital status on the last day of the year, December 31, determines your filing status for federal income tax. And your filing status determines which tax rates apply to your income.
Married Filing Jointly
If you are married on the ...