Craig Lundquist and Kristin Becker photo
Ideal Wealth Advisors logo

Craig Lundquist, MBA, ChFC®, CRPC®

VP of Wealth Management

craig.lundquist@lpl.com

651-773-2757

 

Kristin Becker

Senior Administrative Assistant

kristin.becker@lpl.com

651-773-2821

 

Ideal Wealth Advisors

Located at Ideal Credit Union

8499 Tamarack Road

Woodbury, MN 55125

 

CRPC conferred by College for Financial Planning

March/April 2023

Tax Breaks for the Recently Divorced

Divorce can negatively affect the finances of both spouses, so it’s helpful to work with your tax and financial professionals so you are aware of tax breaks that may lessen the financial burden.


Filing Status
If you’re still married as of December 31, it may be advantageous to file a joint income tax return. Alternatively, if you’ve lived apart for at least six months, file a separate return, and have a dependent living with you for more than half the year, you may qualify to file as head of household.


Home Sale
Individuals can exclude $250,000 of gain ($500,000 for couples) on the sale of a home owned and lived in for at least two of the last five years. Sales after a divorce can still qualify for a reduced exclusion even if the two-year test hasn’t been met.


Alimony
You can deduct alimony you pay to an ex-spouse if the divorce agreement was in place and not changed before December 31, 2018. Otherwise, it’s not deductible (or taxable to the recipient).

Working with a tax professional can help ensure that you are paying only the taxes you owe.

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