Divorce financial planning: the money questions women ask first

Written and reviewed by Dr. Pat Pachciarz® · Updated October 3, 2026 · Educational, not individual advice.

These answers cover the tax and money questions we hear most. For a deeper guide, see Divorce Financial Planning on drpat.co.

What should I know first?

• Gather tax returns, pay stubs, account statements, retirement plan statements and debt records early.
• Retirement plans need the right order: QDRO for most employer plans, QILDRO for Illinois public pensions.
• Update beneficiaries, powers of attorney and your estate plan once the divorce is final.
• Model cash flow for the house before deciding to keep it.

Common questions

Is alimony taxable after a divorce?

For divorce or separation agreements executed after 2018, federal law treats alimony as neither deductible by the payer nor taxable to the recipient. Older agreements generally follow the old rules unless modified to adopt the new ones. Child support is never deductible or taxable.

Sources: IRS Publication 504: Divorced or Separated Individuals

What filing status do I use the year I divorce?

If your divorce is final by December 31, you're considered unmarried for the whole year. You'll generally file as single, or as head of household if you paid more than half the cost of keeping up a home for a qualifying person.

Sources: IRS Publication 504: Divorced or Separated Individuals · IRS Publication 501: Dependents, Standard Deduction, and Filing Information

Who claims the children on taxes after a divorce?

Generally the custodial parent, meaning the parent the child lived with for more nights during the year. The custodial parent can release the claim to the other parent with Form 8332, which affects some benefits but not others.

Sources: IRS Publication 504: Divorced or Separated Individuals

Will I owe tax if I sell the house after the divorce?

Maybe not. If you owned and lived in the home as your main home for at least two of the five years before the sale, you can generally exclude up to $250,000 of gain as a single filer. Time spent in the home by a former spouse under the divorce decree can count in some cases.

Sources: IRS Topic 701: Sale of your home · IRS Publication 504: Divorced or Separated Individuals

How does DAITT® help with this?

Every engagement moves through the five DAITT® disciplines in order, so the tax, legal and investment pieces are decided together.

1. Debt Optimization

   Sort which debts are joint and which are yours.

2. Advanced Planning

   Build a post-divorce budget and emergency reserve.

3. Tax Strategy and Tax Filing

   Plan your filing status, alimony and child tax benefits.

4. Private Wealth Investments

   Divide and re-invest retirement accounts the right way.

5. Trust Planning

   Update your will, trust and every beneficiary form.

How do we show our value?

We explicitly show you our value, in writing, before you hire us. If we can't find it or explicitly show you, you don't pay.

Book a Clarity Call or see your Leak Score

Sources

• IRS Publication 504: Divorced or Separated Individuals
• IRS Publication 501: Dependents, Standard Deduction, and Filing Information
• IRS Topic 701: Sale of your home

More answers

• Caregiving for aging parents: money, taxes and protecting your own future
• Trust planning and family governance: the trust, the assets and bringing the kids in
• Inheritance taxes: do I owe money on what I got left?
• Widowhood: money decisions in the first year after losing a spouse
• QDRO and QILDRO: dividing retirement plans in an Illinois divorce
• Pre-retirement planning at 55: trust planning first, then income, health care and taxes
• Social Security for women: retirement, spousal, survivor and divorced-spouse benefits
• Medicare at 65: when to sign up and how it fits your retirement plan
• Tax strategy and tax filing for women in transition
• drpatclarity.com home

Also see drpat.co and the Pinnacle FAQ.