Year-End Financial Prep for Divorce: Documents and Decisions Before December 31

If you are divorcing, December 31 matters because your marital status on that day sets your federal tax filing status for the year. Year-end statements also become key records for your case. A little preparation before the year closes can save time and money in the months ahead.

Here are the year-end documents to gather and the decisions to think through.

Why December 31 Matters for Taxes

For federal taxes, your filing status depends on your marital status on the last day of the tax year. If a final decree of divorce or legal separation is entered by then, you are treated as unmarried for the whole year; if not, you are treated as married. For agreements executed after 2018, alimony is not deductible by the payer or taxable to the recipient.¹

Talk with a tax professional about how the timing of your Colorado divorce affects your return.

Documents to Gather

Each spouse must provide a sworn financial statement, three years of tax returns, and other financial records as mandatory disclosures.²

• Year-end statements for bank, retirement, and investment accounts.
• Final pay stubs and W-2s showing total annual income.
• Mortgage and loan statements with year-end balances.
• Business records if you or your spouse own a business.

Organized records make every stage of a divorce faster and less expensive. Johnson Law Group offers a no-pressure consultation to plan your next steps, so schedule a consultation before the year ends.

Decisions to Consider Before Year-End

• Withholding: update your W-4 if your filing status will change.
• Large purchases or transfers: avoid unusual spending while your case is pending.
• Retirement contributions: ask a financial professional how contributions affect the property division.

Property is generally valued as of the decree or an earlier property hearing, so year-end values may not be final values.³ Financial considerations for divorce include temporary orders, disclosures, and post-decree steps.

Talk With a Colorado Divorce Attorney

A clear year-end plan gives you a steadier start to the new year. Johnson Law Group is here to help.

The attorneys at Johnson Law Group help clients organize finances and plan divorce timing and will give you a clear read on your options. Schedule a free consultation through our Colorado offices, and we will serve as your North Star from here.

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