view our Practice areas

Three ways divorce impacts your taxes

A finalized divorce decree results in more than just the end of a marriage, it also results in a division of assets. If not done carefully, the settlement agreement can result in unexpected surprises. One area that can lead to unexpected outcomes is the impact a divorce will have on your taxes.

Why should tax considerations play a role in divorce negotiations?

Whenever assets are transferred it is wise to consider any potential tax implications. This is especially true during divorce. In fact, the issue is so prevalent that the Internal Revenue Service (IRS) recently issued a tax tip focusing on this specific issue.

Three examples touched on by the agency that those going through a divorce should keep in mind during the divorce settlement negotiations are:

  • Alimony. If you are considering requesting or providing alimony payments it is important to take the tax implications into account before coming up with a final agreement. Generally, alimony that is paid to a spouse or former spouse can be deducted from the payer's tax return as long as these payments are included within the divorce decree. Voluntary payments, or those that are not outlined within the final divorce settlement agreement, are not eligible. On the flip side, taxes apply to the person receiving the payments as the IRS essentially views these as a form of income.
  • Child support. If children are present, child support will likely be paid. Unlike alimony payments, child support is not a deductible expense. Those making these payments should not attempt to claim the expense as a deduction on tax returns.
  • IRA contributions. Wise retirement planning takes advantage of various tax benefits tied to certain contributions. One example is the tax benefit tied to contributing to an IRA. It is important to note that you cannot claim deductions for contributions made to a former spouse's IRA for the tax year of the divorce.

These are just three of the many implications that should be taken into consideration when negotiating a final decree of divorce. Due to the complex nature of divorce, it is wise for those considering or who have recently filed for a divorce to seek the counsel of an experienced divorce attorney. This legal professional will advocate for your rights, working to better ensure a more favorable outcome.

No Comments

Leave a comment
Comment Information

We Listen, We Help, We Care

  • Hi Yuliana and Attorney Prince, Thank you so much for taking time out of your busy day to meet with me. I really appreciated how compassionate you were while listening to my situation, even through my tears. Thank you so much for sharing such valuable information with me. I left feeling very hopeful that when the dust settles, I’ll be ok.
  • Wendy helped guide us through a very difficult and emotional process and was really able to provide an even and fair account for both parties. It's quite evident in her expertise in this area but the way she was able to make you feel safe and secure in a very insecure time goes far beyond her legal prowess. If the two parties are really willing to cooperate and collaborate, she's there to help gain the best possible solution for all involved, especially if there are children.
  • Regardless of how committed one is to the fact that divorce may be imminent and necessary, it is truly one of the most emotional and stressful situations one can experience. It can also be daunting. Wendy has a remarkable ability to cut through the noise and help you focus on the big picture while drilling down on what is most pertinent to your particular situation., they are a formidable team who work collectively with your best interests in mind.
Email Us For a Response

Let Us Help You Move Forward

Call The Prince Law Group, LLC, in Stamford, Connecticut, at 203-977-3700 or contact us online to schedule your complimentary consultation with one of our lawyers. We will accommodate your schedule with an evening appointment. Spanish translator services available.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Prince Law Group BBB Business Review
Review Us

1 Atlantic Street
6th Floor
Stamford, CT 06901

Phone: 203-653-8483
Stamford Law Office Map

The Prince Law Group

Valet Parking at the Marriott Courtyard

Flexible Hours – Evening Hours Available by Appointment

Walking Distance to the Stamford Train Station