Filing Taxes After Divorce: A Practical Guide

Divorce changes nearly every aspect of your life, including how you file your taxes. When your marital status shifts, so do your tax obligations, deductions, and filing status options. Filing taxes after divorce introduces new considerations that can significantly impact your financial situation. Whether you’re recently separated or finalizing your divorce, understanding the tax implications is essential for avoiding costly mistakes and maximizing potential benefits. This guide will help you understand the fundamental changes to your tax situation post-divorce, from determining your filing status to handling dependent exemptions and addressing property transfers.

Couples can also consult a financial advisor to help them divide assets and plan for a financial future after divorce.

1. Determine Your Filing Status

The filing statuses that you can use will depend on when your divorce is completed. If you complete your divorce on or before Dec. 31 (the final day of the tax year), then you cannot file a joint tax return. If the new year starts before your divorce becomes official, the IRS will still recognize you as married, and therefore allow you to file a joint return for the previous year. You’re also eligible to file a joint return, but if you do not want to, you can choose the married filing separately status.

If you’re still legally married, filing a joint tax return may be your best option because you can get a higher standard deduction by combining your income with your spouse. The standard deduction is the amount of income that you can use to lower your tax bill.

For tax year 2025, the standard deduction is $30,000 for married couples filing jointly, $15,000 for single filers and married couples filing separately, and $22,500 for heads of households.

For tax year 2024, the standard deduction was $29,200 for married couples filing jointly, $14,600 for single filers and married couples filing separately, and $21,900 for heads of households.

For those who cannot file a joint return, you may still be able to save some money by filing as a head of household. Keep in mind that filing taxes after divorce gets complicated. So remember that if you and your ex-spouse are sharing custody of a child, only one of you can file as head of household (more on that later).

When filing taxes after divorce, you can only use the head of household status if you meet all three of the following requirements:

On the last day of the year, you were considered unmarried (so you were single, divorced or legally separated).
You paid more than half of the costs of keeping up a home for the year. That could include real estate taxes, home insurance, repairs, utilities and food eaten in the home.
You lived with a qualifying dependent (such as a child or other dependent) for more than six months of the year.

2. Update Your W-4

If you and your spouse are employed, you will each fill out a W-4. This form tells your employer how much to withhold from your paycheck. Joint filers need to split their W-4 withholding between both spouses, so if you divorce, you may need to recalculate or adjust your allowances. Here’s a complete guide to filling out your W-4.

3. Consider Alimony and Child Support

Alimony payments from divorce or separation agreements that were finalized before Jan. 1, 2019 are still considered an above-the-line deduction when filing taxes. If your divorce is finalized after that date, those payments are not considered to be deductible, although you should confirm with your tax expert to see if you can still deduct alimony payments when calculating your adjusted gross income.

On the flip side, all alimony payments received from divorces that were finalized before Jan 1, 2019, qualify as income (unless your agreement defines it differently). If that applies to you, you would need to report these payments on your Form 1040. Note that if you receive or make alimony payments, you cannot use forms 1040A or 1040EZ.

Child support payments work the opposite way of alimony payments. You cannot deduct any child support payments that you make. If you receive child support, you do not have to report it as income on your tax return.

4. Know Who Can Claim Children as Dependents

If you have children, it’s important to understand who can claim them as dependents. This will affect tax credits that you can claim as well as your filing status.

The parent who can claim a child as a dependent is the custodial parent. The custodial parent is the one with whom the child lives for more nights during the tax year. A divorce agreement will often name the custodial parent.

If you are the custodial parent, you are eligible to claim the child as a dependent. That means you have the potential to claim the Earned Income Tax Credit (EITC), as well as the Child and Dependent Care Tax Credit. When filing taxes after divorce, you may also be eligible to file taxes using the head of household status. As mentioned above, this will affect your income tax brackets when filing taxes after divorce.

If you are not the custodial parent, you are the noncustodial parent for tax purposes and cannot claim the EITC or the child and dependent care credit. You also cannot file your taxes as a head of household. However, you may be able to claim some credits.

The noncustodial parent can claim a child as a dependent if the custodial parent signs Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. In that case, the noncustodial parent is eligible to claim the Child Tax Credit and the Additional Child Tax Credit.

To use Form 8332, the custodial parent will need to sign it and the noncustodial parent will need to attach it to his or her tax return. Complete one copy of Form 8332 for each child.

Note that if you are the custodial parent and you sign Form 8332, you can no longer claim the child as your dependent, and you cannot revoke it until the following tax year. You should also keep in mind that the Trump tax plan eliminated exemptions for dependents in favor of a higher standard deduction.

Can I Deduct Legal Fees When Filing Taxes After Divorce?

In general, you cannot deduct legal expenses from filing for a divorce. For example, you cannot deduct fees for counseling, litigation or tax advice that you got during your divorce.

The 2017 Trump tax plan also eliminated the deduction of legal expenses that were associated with generating income (e.g., seeking to receive property or alimony payments). Before the tax code changes, those legal fees qualified as a miscellaneous itemized deduction.

It is worth noting that for taxpayers filing now, the IRS said that “if you have no legal responsibility arising from the divorce settlement or decree to pay your spouse’s legal fees, your payments are gifts and may be subject to the gift tax.”

For any questions about divorce legal fees, it is best to talk to a tax expert. This will help to ensure that you handle everything properly.

Tips for Tax Planning After a Divorce

Divorce brings significant financial changes, and understanding the tax implications is crucial for protecting your financial future. Proper tax planning after a divorce can help you avoid costly mistakes and maximize potential benefits during this transition.

Update your filing status: Your marital status on December 31st determines your filing status for the entire tax year. If your divorce was finalized by year-end, you’ll file as single or head of household (if you have qualifying dependents). This change affects your tax brackets, standard deduction amount, and potential credits you may claim.

Understand alimony tax treatment: For divorces finalized after December 31, 2018, alimony payments are no longer tax-deductible for the payer or taxable income for the recipient. However, if your divorce was finalized before 2019, the old rules may still apply, making this an important distinction for tax planning after a divorce.

Determine who claims dependents: Only one parent can claim a child as a dependent on their tax return. This designation affects several valuable tax benefits, including the Child Tax Credit and head of household filing status. Your divorce decree should specify these arrangements, but you may need additional documentation if circumstances change.

Review retirement account divisions: Transfers of retirement assets through a Qualified Domestic Relations Order (QDRO) avoid early withdrawal penalties, but subsequent withdrawals will be taxable. Consider consulting with a financial advisor about rollover options to maintain tax-advantaged growth.

Reassess your withholding: After divorce, your income and deductions will likely change significantly. Update your W-4 with your employer to ensure you’re withholding the appropriate amount and avoid surprises at tax time.

Proper tax planning after divorce can help you establish financial independence and stability. Consider working with a tax professional who specializes in divorce situations to ensure you’re making informed decisions during this transition.

Bottom Line

If you’re going through a divorce, it’s important to make sure you understand how it will impact your taxes. For starters, review your filing status. You will not be able to file a joint return if your divorce goes through on or before Dec. 31. If your divorce wasn’t complete until the start of the new year, it’s still possible to file jointly. Alimony can still factor into your AGI, but child support will not. If you have any specific tax questions about your divorce, it’s best to work with a tax professional.

Tips for Getting Through Tax Season

Divorce can easily get in the way of your retirement plans. Not only can it get expensive, but you may also lose or gain assets during the process. Consider working with a financial advisor to help you create a plan for your financial goals after divorce. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Let’s say you file a joint return with your ex-spouse and you expect a refund. Make sure you understand who will get the refund. This tax refund calculator will give you an idea of whether or not you can expect a refund.
There are several credits available to taxpayers with children. We mentioned some of them, but there are also other benefits such as state income tax credits. You can learn more about child tax credits and their requirements by reading our guide to child tax credits.