![](\"https:\/\/s3.amazonaws.com\/snd-store\/a\/99744532\/07_16_24_2263334489_mb_560x292.jpg\")
<\/p>\n<\/p>\n
Divorce entails difficult personal issues, and taxes are probably the farthest thing from your mind. However, several tax concerns may need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are six issues to be aware of if you\u2019re in the process of getting a divorce.<\/p>\n
1. Personal residence sale <\/strong><\/p>\n In general, if a couple sells their home in connection with a divorce or legal separation, they should be able to avoid tax on up to $500,000 of gain (as long as they\u2019ve owned and used the home as their principal residence for two of the previous five years). If one former spouse continues to live in the home and the other moves out (but they both remain owners of the home), they may still be able to avoid gain on the future sale of the home (up to $250,000 each), but special language may have to be included in the divorce decree or separation agreement to protect this tax exclusion for the spouse who moves out.<\/p>\n If the couple doesn\u2019t meet the two-year ownership and use tests, any gain from the sale may qualify for a reduced exclusion due to unforeseen circumstances.<\/p>\n 2. Pension benefits<\/strong><\/p>\n A spouse\u2019s pension benefits are often part of a divorce property settlement. In these cases, the commonly preferred method to handle the benefits is to get a \u201cqualified domestic relations order\u201d (QDRO). This gives one former spouse the right to share in the pension benefits of the other and taxes the former spouse who receives the benefits. Without a QDRO, the former spouse who earned the benefits will still be taxed on them even though they\u2019re paid out to the other former spouse.<\/p>\n 3. Filing status<\/strong><\/p>\n If you\u2019re still married at the end of the year, but in the process of getting divorced, you\u2019re still treated as married for tax purposes. We\u2019ll help you determine how to file your 2024 tax return \u2014 as married filing jointly or married filing separately. Some separated individuals may qualify for \u201chead of household\u201d status if they meet the requirements.<\/p>\n 4. Alimony or support payments<\/strong><\/p>\n For alimony under divorce or separation agreements that are executed after 2018, there\u2019s no deduction for alimony and separation support payments for the former spouse making them. And the alimony payments aren\u2019t included in the gross income of the former spouse receiving them. (The rules are different for divorce or separation agreements executed before 2019.) This was a change made in the Tax Cuts and Jobs Act. However, unlike some provisions of the law that are temporary, the repeal of alimony and support payment deduction is permanent.<\/p>\n 5. Child support and child-related tax return filing<\/strong><\/p>\n No matter when the divorce or separation instrument is executed, child support payments aren\u2019t deductible by the paying former spouse (or taxable to the recipient). You and your ex-spouse will also need to determine who will claim your child or children on your tax returns in order to claim related tax breaks.<\/p>\n 6. Business interests <\/strong><\/p>\n If certain types of business interests are transferred in connection with divorce, care should be taken to make sure \u201ctax attributes\u201d aren\u2019t forfeited. For example, interests in S corporations may result in \u201csuspended\u201d losses (losses that are carried into future years instead of being deducted in the year they\u2019re incurred). When these interests change hands in a divorce, the suspended losses may be forfeited. If a partnership interest is transferred, a variety of more complex issues may arise involving partners\u2019 shares of partnership debt, capital accounts, built-in gains on contributed property and other complex issues.<\/p>\n A range of tax challenges<\/strong><\/p>\n These are just some of the issues you may have to cope with if you\u2019re getting a divorce. In addition, you may need to adjust your income tax withholding, and you should notify the IRS of any new address or name change. There are also estate planning considerations. We can help you tackle the financial issues involved in divorce.<\/p>\n \u00a9 2024<\/em><\/p>\n <\/body> Divorce entails difficult personal issues, and taxes are probably the farthest thing from your mind. However, several tax concerns may need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are six issues to be aware of if you\u2019re in the process of […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,6,10],"tags":[8,11,12],"class_list":["post-16948","post","type-post","status-publish","format-standard","hentry","category-articles","category-individual-tax","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16948"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16948\/revisions"}],"predecessor-version":[{"id":16949,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16948\/revisions\/16949"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n<\/html><\/p>\n","protected":false},"excerpt":{"rendered":"