Deciding who gets what in a divorce is one thing. Determining the most advantageous way to divide assets into equitable shares is another thing entirely.
Tax nearly always factors into division strategies. You will probably face some tax complexities both during the process and in the years immediately following your divorce.
Example: dividing a retirement account
One of the largest assets in your marriage is probably your retirement account. It also might be one of the more complex in terms of taxes.
Retirement accounts are typically subject to division. You would typically need something called a qualified domestic relations order to tell your account manager that you had a legitimate reason for taking money out of the retirement account and putting it into another one. Otherwise, you could face significant dilution of this asset.
Another potential issue would be if you and your spouse had different types of retirement accounts. For example, a Roth account might be worth more, dollar for dollar, than a traditional retirement account. This is because Roth accounts use after-tax money and allow tax-free distributions.
IRS Publication 504 for divorce and taxes
The IRS has an extensive resource that helps you understand your tax rules, potential benefits and filing status as a recently-divorced person. That said, on top of all of the other forms and references you have been (or likely will be) ingesting over the course of the divorce process, a publication from the IRS might be the last thing you want to read.
It is important to get the best possible resolution when doing something as permanent as dissolving your marriage. This typically requires extensive knowledge of various financial and legal factors, along with the ability to apply said knowledge to your unique situation.
