Update Your Filing Status
After a divorce, it’s important to update your filing status with the IRS. If your divorce was finalized by December 31 of the tax year, you can no longer file a joint tax return with your ex-spouse. You will need to file as either single or head of household.
Splitting Retirement Accounts
When dividing assets and liabilities, consider the tax consequences of each item. Some assets, such as retirement accounts, may have tax implications when distributed. Liabilities, such as mortgage debt, may also have tax implications.
Work with a tax professional and an attorney at Rigden Lieberman, LLC to determine the most tax-efficient way to divide assets and liabilities. Splitting retirement accounts during a divorce can also have tax implications. In order to avoid taxes and penalties, the transfer of retirement funds must be done in accordance with IRS regulations. A qualified domestic relations order (QDRO) may be necessary to divide the accounts properly.
Dealing with tax issues in a divorce can be complex and confusing. It may be helpful to consult with a tax professional to determine the best course of action for your situation. They can provide guidance on specific tax implications and help you avoid any potential tax pitfalls.