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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
September/October 2025
Understanding Divorce Tax Missteps
Divorce is emotionally challenging and financially complex. One challenging aspect to navigate is the tax implications.
Alimony. For divorces finalized before January 1, 2019, alimony payments are deductible by the payer and taxable to the recipient. For divorces finalized afterward, it's a different story. Alimony recipients aren't taxed on the payments. Nor can the payer deduct them.
Property Division. Even simple property divisions can have tax traps. For instance, consider future tax implications if you're awarded the family home. When you eventually sell it, you could face capital gains taxes on any increase in its value.
Child Support. Child support payments aren't taxable for the recipient nor deductible by the payer. However, who gets to claim the child for tax purposes can be tricky. Usually, the parent with whom the child resides most of the year gets the deduction, but this can be negotiated in your divorce agreement.
Tax Filing Status. If you were still married on December 31 of the tax year, you're probably eligible to file as "married filing jointly," which often results in lower taxes. If your divorce is finalized within the same year, you might need to choose between "single" or "head of household." The latter can offer more favorable tax rates, but you must meet specific requirements. Discussing financial matters openly with your soon-to-be ex can help eliminate confusion. And you'll want to consult with a tax professional to avoid any nasty tax surprises post-divorce.
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
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CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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