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Finesse Your Finances After a Divorce

« Back to Individual Tax

Divorce brings with it a number of life changes. Your financial situation may be one of them. Here are steps to take to make sure your finances stay on track.

Assess Your Income and Expenses

Living on one income can be difficult if you're used to having two. While some of your expenses such as food and clothing may be less, others, like property taxes and phone and cable charges, may stay the same. Review all of your income sources and list your expenses. If there's a gap, you'll need to find ways to either increase your income or cut back on what you spend.

Close Your Joint Accounts

It's certainly a good idea to close any joint bank and investment accounts you have with your ex-spouse after dividing the assets according to the terms of your separation or divorce decree. You should cancel any joint credit cards that you have and apply for an individual credit card if you don't have one.

Make sure you both have copies of all important legal information, including final decrees, orders, and judgments, as well as financial information, such as bank and investment statements, loan documents, tax returns, and insurance policies.

Think About Taxes

Consider the income tax implications when you are negotiating how assets will be divided. Tax liabilities may leave one of you with fewer net assets than the other, even though it seems as if property is being equally divided.

Also keep in mind that alimony payments are no longer deductible or taxable.


Contact Our CPA Firm

2501 Chatham Road, Suite 120,
Springfield, IL 62704

Phone number: 217-544-2120
Email address: amurphy@central-illinois-cpa.com

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