The Tax Side of Divorce: Protecting Your Financial Future

Navigating a divorce is an emotionally taxing journey, but the long-term financial and tax implications often present a secondary, complex challenge that requires careful strategy. In this episode of Her Wealth: Unscripted, Sara Gelsheimer sits down with Susan Jones—a tax attorney, CFP®, and Certified Divorce Financial Analyst—to discuss how to protect your assets during and after a marital split. We explore why the timing of your filing status matters, the hidden "tax traps" in keeping the family home, and why $1 million in a Roth IRA is vastly different from $1 million in a traditional IRA. Our goal is to empower you with the technical knowledge needed to make informed decisions during a time of significant personal upheaval.

You’ll learn:

• Why your filing status on December 31st dictates your entire tax year.
• The reality of "Joint and Several Liability" and why filing jointly isn't always the best move.
• How the 2018 tax law changes eliminated the "win-win" deduction for alimony.
• The critical difference between $250k and $500k capital gains exemptions when selling a home.
• Why keeping the family home might leave you with fewer liquid assets than you realize.
• How to negotiate the division of estimated tax payments before the papers are signed.
• The importance of tax projections to avoid an "April Surprise" post-divorce.

Chapters:

00:00 – Introduction to Susan Jones and the CDFA Credential

01:45 – Why Women Often Face Greater Risks in Divorce Financials

03:19 – Timing the Split: Deciding When to File

04:14 – The Risks of Joint Tax Liability

05:33 – Post-2018 Alimony Rules and Retirement Impacts

06:44 – Head of Household Status and Child Tax Credits

09:14 – The "Home Trap": Capital Gains and Cost Basis

13:00 – Liquid Assets: Roth vs. Traditional IRAs

16:18 – Managing Estimated Payments and Tax Projections

At Sorelle Wealth Partners, we believe that financial clarity leads to confidence. For more insights on navigating complex financial transitions, visit the Sorelle Journal at our website. If you are currently navigating a divorce and need a specialist's eye on your assets, we are here to help.

Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. It is important to note that federal tax laws under the Internal Revenue Code (IRC) of the United States are subject to change, therefore it is the responsibility of taxpayers to verify their taxation obligations.