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Divorce timing matters for tax filing status

It's hard to imagine a divorce that doesn't change your financial status in some way. Though it might not be the biggest change, it's also important to think about changes to your tax status.

When it comes to taxes, your status on December 31 will often determine your filing status for the year.

Here are some simple examples:

  • Your divorce is finalized on December 30. You'll most likely file as single.
  • You separate in December but don't receive a final decree of divorce until January. You'll most likely file as married - either filing jointly or filing separately (you'll have to agree with your spouse on this).

Who's Head of Household?

Here's where things get a little more complicated, and where taxes can intersect with custody issues.

If you've been living apart from your spouse for more than half of a tax year, you can be considered "unmarried" for tax purposes. This doesn't allow you to file as single, but does make it possible for you to file as Head of Household if you meet the other requirements:

  • You've paid more than 50% of household costs for you and at least one dependent.
  • Your home has been the main home of your dependent for at least half of the tax year.

If you're not sure, the IRS has a handy online tool for determining your filing status. There are enough uncertainties that come with divorce - a surprise at tax time doesn't have to be one of them.

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