Divorce can affect every aspect of your life, including your tax situation. Specifically, your filing status, the deductions for which you may be eligible, and your tax liability can all be impacted when you legally part ways with your spouse. Understanding what changes to expect can help you plan ahead and avoid a surprise tax bill.
How Does Divorce Change Your Tax Filing Status?
While you were previously able to file taxes jointly with your spouse, you will no longer be able to do so once you are divorced. Your filing status for a tax year generally depends on whether you are married or divorced on December 31 of that year. If you were legally divorced on the last day of the year, for tax purposes, you are considered unmarried for the entire tax year.
Available filing statuses post-divorce can include the following:
- Single — If you are legally divorced by the end of the year and do not meet the requirements to file as “head of household,” you must file your taxes as “single.” With this filing status, you are responsible only for your own taxes and cannot be held jointly liable for your former spouse’s tax obligations.
- Head of household — The “head of household” tax status offers a higher standard deduction and more favorable tax treatment than the status “single”. However, there are strict criteria that must be met in order to file as “head of household.” You must have been unmarried and pay for more than half the costs of upkeeping a home for the year and have had a qualifying relative live with you for more than half the year. One important wrinkle here if you are still married – if you have lived apart from your spouse for the last six months, paid more than half the costs of upkeeping a home for the year, and have had a qualifying relative live with you for more than half the year, you can claim this filing status.
- Married filing separately — If you are in the process of getting divorced, but the matter has not been finalized by the end of the year, you are still legally married. In such cases, you can file your taxes under the status, “married filing separately.” This allows you to report only your own income and remain responsible only for your own tax obligations. Discuss with your CPA whether this makes sense.
It’s vital to choose the correct tax filing status after divorce. Not only does your filing status affect your tax brackets, deductions, and eligibility for tax credits, but filing incorrectly could also result in overpaying — or owing additional taxes, penalties, and interest.
How Does Your Tax Filing Status Affect Your Tax Bracket?
Your tax filing status determines the brackets your taxable income is subject to. Once your filing status changes in divorce, you may move into a higher-rate bracket than a married filer. The filing statuses “single” and “married filing separately” typically have less favorable tax treatment compared with joint filers due to the narrower bracket thresholds. A single or separate filer can enter a higher tax bracket with a lower amount of taxable income than a married couple filing jointly with the same amount of income combined. But again, all this depends on your unique situation.
How Does Divorce Impact Your Tax Deductions?
In addition to understanding how your tax filing status impacts your tax bracket, it’s essential to understand how your new status may affect your deductions. Whether you file as “single,” “married filing separately,” or as “head of household,” the standard deduction is lower than that for joint filers. This means that even if your overall income remains the same, your taxable income could increase.
Notably, the standard deduction for “head of household” filers is significantly larger than that for those filing as “single” or “married filing separately.” For tax year 2025, the standard deductions are as follows:
- $31,500 for married filing jointly
- $23,625 for head of household
- $15,750 for single
- $15,750 for married filing separately
If you are not legally divorced by the end of the tax year and file as “married filing separately,” you are not permitted to take the standard deduction if your spouse itemizes their deductions. You would also be required to itemize, regardless of whether your itemized expenses are less than the standard deduction amount. However, as mentioned above, you may be able to file as head of household, which many people overlook.
Contact an Experienced Tax Professional
If you are newly divorced or going through the process, it’s important to have an experienced tax professional by your side who can advise you of the tax consequences in your specific situation. Based in Fairfield, Connecticut, Rolleri & Sheppard CPAS, LLP offers a wide range of financial and accounting services for individuals facing divorce. Contact us online or call (203) 259-CPAS to schedule a consultation.
