--- title: Tax Options For End of Year Divorce - Mahlen Financial description: How are taxes handled next spring for couples who are in the midst of a divorce and unsure if it will be finalized by the end of the year?  Various possibilities exist and should be written in the separation agreement to avoid costly mistakes and... image: https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_46a6dc88e2744963bbb038621c6e175f~mv2.webp --- ## A.M. Financial - [Services](https://amf-divorce.com/divorce-transition-services) - [Service Plan](https://amf-divorce.com/service-plan) - [Frequently Asked Questions](https://amf-divorce.com/frequently-asked-questions) - [Our Blog](https://amf-divorce.com/our-blog) - [About Amy](https://amf-divorce.com/about-amy) - [Contact Us](https://amf-divorce.com/contact-us) - [Services](https://amf-divorce.com/divorce-transition-services) - [Services](https://amf-divorce.com/divorce-transition-services) - [Service Plan](https://amf-divorce.com/service-plan) - [Frequently Asked Questions](https://amf-divorce.com/frequently-asked-questions) - [Our Blog](https://amf-divorce.com/our-blog) - [About Amy](https://amf-divorce.com/about-amy) - [Contact Us](https://amf-divorce.com/contact-us) [Book a Meeting](https://calendly.com/amymahlenmelander/consultdivorcefinancialplanning) # Tax Options For End of Year Divorce June 01, 2022 4 minutes to read How are taxes handled next spring for couples who are in the midst of a divorce and unsure if it will be finalized by the end of the year?  Various possibilities exist and should be written in the separation agreement to avoid costly mistakes and future disagreements. *\*It is always advised to seek professional tax advice regarding your personal situation\** The following options are available depending upon the uncontrollable factor of a decree being issued on or before December 31st.  Therefore, it is wise to include arrangements for either scenario.  ![](https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_46a6dc88e2744963bbb038621c6e175f~mv2.webp) ![](https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_46a6dc88e2744963bbb038621c6e175f~mv2.webp) **Options When NO DECREE Issued Before December 31st:** **Married Filing Jointly** This option is only available to couples whose divorce has not been finalized by the end of the year.  Generally, this option achieves the lowest tax burden to the overall marital estate.  Even though it maybe unknown at the time of the agreement unless a tax estimate is completed, a couple should address how they plan to split tax refunds or payments due (i.e. 50/50).  There are situations when filing jointly may not be the most effective tax choice for an individual or the couple.  For example, if there is a large income or tax withholding disparity between the couple or large student loan debt in one individual’s name among other possibilities, it maybe advantageous to consider other tax filing options such as Married Filing Separately. Standard Deduction (2019): $24,400 **Married Filing Separately** This option should be considered when a spouse does not trust their partner’s financial reporting (i.e. hidden assets, fraud concerns, etc.) or if an exception to joint filing as listed above may exist.  It is best to explore this option with a tax professional because many tax benefits available when filing jointly are either significantly minimized or not available when filing separately. Standard Deduction (2019): $12,200 **Head of Household** Filing Head of Household can be an option for a legally married individual if the couple has not been living together for the last 6 months of the tax year (July 1st through December 31st) and the taxpayer can claim at least one dependent for half the year or more.  The IRS enacted the Abandoned Spouse Rule to prevent a partner from leaving the home essentially forcing the staying spouse to use unfavorable Married Filing Separate tax rates while supporting dependents.  The increased standard deduction is significantly higher then Married Filing Separately and many of the other minimized tax benefits do not exist. Standard Deduction (2019): $18,350 ![](https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_838eeae984e24d8d9209e8a5254aece7~mv2.webp) ![](https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_838eeae984e24d8d9209e8a5254aece7~mv2.webp) **Options When DECREE ISSUED Before December 31st:** **Individual** If a divorce has been stamped by a judge on or before December 31st and no children or other dependents exist, the only available option is an individual filing.  Working spouses will either be solely responsible for their tax due or will receive their refund and not required to share unless agreed upon otherwise. For an individual that is not employed (i.e. a stay at home mom) and has no wages this typically means there is no income tax due, or very little, assuming no other taxable events were triggered during the year; for example, an investment was sold and triggered capital gains, taxable investment earnings were received that were awarded to the taxpayer, or a distribution was made from a retirement account, etc.  Standard Deduction (2019): $12,200 **Head of Household** Filing Head of Household is the most financially beneficial tax filing post-divorce and can be claimed as an unmarried individual.  If a divorce has been finalized during the year, the Abandoned Spouse Rules as discussed above does not exist.  The only requirement to that must be met, other than not being married, is the dependent rules which state a taxpayer must have the majority of overnights with a dependent during the tax year and provide at least half or more of their support. The overnight requirement is a separate issue from child exemption or credit agreements that maybe shared post-divorce.  For example, if the agreed upon parenting plan provides a parent with 183 overnights or more during the year yet for the given tax year the other parent claims the child credit(s), the parent with the majority or overnights can still file Head of Household. If there are two or more children in a family where 50/50 custody exist, planning can be done ahead of time where both parents can claim Head of Household each year if addressed properly in the parenting plan. Standard Deduction (2019): $18,350 **Conclusion** If you are nearing the end of your divorce and unsure if it will be finalized by the end of the year, it is important to consider and address in your separation agreement potential tax outcomes.  Completing a tax analysis is prudent to know where you stand to negotiate various outcomes.  Once paperwork is filed and a decree is issued, making changes or addressing items that were left out becomes more expensive and difficult post-divorce. ***It is possible to plan for a smooth financial transition today that leads to a stronger tomorrow.*** Contact Amy at A.M. Financial for all of your Denver Divorce Financial Planning needs [here](https://www.mahlenfinancial.com/contact).    ![](https://static.hsstatic.net/BlogImporterAssetsUI/ex/missing-image.png) ![](https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_03804bbb673f4962b411771c016ee025~mv2-2.webp) - - - - - [mailto:?subject='https://amf-divorce.com/our-blog/tax-options-for-end-of-year-divorce'](mailto:?subject='https://amf-divorce.com/our-blog/tax-options-for-end-of-year-divorce') ### Related Posts ## [Playing Your Cards Right: Divorcees Who Pay 0% Capital Gains Tax](https://amf-divorce.com/our-blog/capital-gains-tax-mahlen-financial) If you are recently divorced, you may be experiencing a lot of ‘firsts’. For example, you may... [CONTINUE READING](https://amf-divorce.com/our-blog/capital-gains-tax-mahlen-financial) ## [Filing for Divorce: Key Considerations](https://amf-divorce.com/our-blog/filing-for-divorce) There is never a good or easy time to file for divorce. 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All rights reserved. A.M. Financial provides supporting financial information, evaluation and analysis to be utilized by the client and the client’s selected attorney if directed, during the process of their divorce. ervices provided in regards to this agreement are solely fee-only and do not involve investment or security advice or insurance transactions. All information is financial in nature and should not be construed or relied upon as legal or tax advice. A.M. Financial IS NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL OR TAX ADVICE. Individuals are encouraged to seek competent legal and tax advice from professionals who specialize in divorce and tax laws in their respective state. Amy Melander (CRD #4692263) is an Investment Adviser Representative of OneDigital Investment Advisors, LLC (ODIA). ODIA and A.M. Financial are independent and unaffiliated entities. ODIA does not offer or provide divorce financial planning services and any statements and/or opinions expressed by A.M. Financial do not represent the views and/or opinions of ODIA.   This website is a publication of A.M. Financial. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Content should not be viewed as personalized investment advice or as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. A professional adviser should be consulted before implementing any of the strategies presented. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "2023-06-01T12:43:43.853Z", "datePublished" : "2022-06-01T12:39:47.000Z", "headline" : "Tax Options For End of Year Divorce - Mahlen Financial", "image" : [ "https://amf-divorce.com/hubfs/Imported_Blog_Media/0cbd19_46a6dc88e2744963bbb038621c6e175f~mv2.webp" ], "mainEntityOfPage" : { "@id" : "https://amf-divorce.com/our-blog/tax-options-for-end-of-year-divorce", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://amf-divorce.com/hubfs/amf-divorce-logo.jpg" } } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "How are taxes handled next spring for couples who are in the midst of a divorce and unsure if it will be finalized by the end of the year? Various possibilities exist and should be written in the separation agreement to avoid costly mistakes and future disagreements. *It is always advised to seek professional tax advice regarding your personal situation* The following options are available depending upon the uncontrollable factor of a decree being issued on or before December 31st. Therefore, it is wise to include arrangements for either scenario. Options When NO DECREE Issued Before December 31st: Married Filing Jointly This option is only available to couples whose divorce has not been finalized by the end of the year. Generally, this option achieves the lowest tax burden to the overall marital estate. Even though it maybe unknown at the time of the agreement unless a tax estimate is completed, a couple should address how they plan to split tax refunds or payments due (i.e. 50/50). There are situations when filing jointly may not be the most effective tax choice for an individual or the couple. For example, if there is a large income or tax withholding disparity between the couple or large student loan debt in one individual’s name among other possibilities, it maybe advantageous to consider other tax filing options such as Married Filing Separately. Standard Deduction (2019): $24,400 Married Filing Separately This option should be considered when a spouse does not trust their partner’s financial reporting (i.e. hidden assets, fraud concerns, etc.) or if an exception to joint filing as listed above may exist. It is best to explore this option with a tax professional because many tax benefits available when filing jointly are either significantly minimized or not available when filing separately. Standard Deduction (2019): $12,200 Head of Household Filing Head of Household can be an option for a legally married individual if the couple has not been living together for the last 6 months of the tax year (July 1st through December 31st) and the taxpayer can claim at least one dependent for half the year or more. The IRS enacted the Abandoned Spouse Rule to prevent a partner from leaving the home essentially forcing the staying spouse to use unfavorable Married Filing Separate tax rates while supporting dependents. The increased standard deduction is significantly higher then Married Filing Separately and many of the other minimized tax benefits do not exist. Standard Deduction (2019): $18,350 Options When DECREE ISSUED Before December 31st: Individual If a divorce has been stamped by a judge on or before December 31st and no children or other dependents exist, the only available option is an individual filing. Working spouses will either be solely responsible for their tax due or will receive their refund and not required to share unless agreed upon otherwise. For an individual that is not employed (i.e. a stay at home mom) and has no wages this typically means there is no income tax due, or very little, assuming no other taxable events were triggered during the year; for example, an investment was sold and triggered capital gains, taxable investment earnings were received that were awarded to the taxpayer, or a distribution was made from a retirement account, etc. Standard Deduction (2019): $12,200 Head of Household Filing Head of Household is the most financially beneficial tax filing post-divorce and can be claimed as an unmarried individual. If a divorce has been finalized during the year, the Abandoned Spouse Rules as discussed above does not exist. The only requirement to that must be met, other than not being married, is the dependent rules which state a taxpayer must have the majority of overnights with a dependent during the tax year and provide at least half or more of their support. The overnight requirement is a separate issue from child exemption or credit agreements that maybe shared post-divorce. For example, if the agreed upon parenting plan provides a parent with 183 overnights or more during the year yet for the given tax year the other parent claims the child credit(s), the parent with the majority or overnights can still file Head of Household. If there are two or more children in a family where 50/50 custody exist, planning can be done ahead of time where both parents can claim Head of Household each year if addressed properly in the parenting plan. Standard Deduction (2019): $18,350 Conclusion If you are nearing the end of your divorce and unsure if it will be finalized by the end of the year, it is important to consider and address in your separation agreement potential tax outcomes. Completing a tax analysis is prudent to know where you stand to negotiate various outcomes. Once paperwork is filed and a decree is issued, making changes or addressing items that were left out becomes more expensive and difficult post-divorce. It is possible to plan for a smooth financial transition today that leads to a stronger tomorrow. Contact Amy at A.M. Financial for all of your Denver Divorce Financial Planning needs here.", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Tax Options For End of Year Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/0cbd19_46a6dc88e2744963bbb038621c6e175f~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/tax-options-for-end-of-year-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ```