Inside the'Divorce Tax' and Its Impact on Men

Even the most amicable separations and divorces are tough. Emotions run rampant, anxiety can be all-consuming, and there's often a lot of money on the line.

The idea that divorce is expensive isn't anything new; a so-called "divorce tax" is a popular topic discussed at parties, in private homes, and on social media. After all, untangling two lives comes with a literal and metaphorical price, and sometimes that can hit men a little harder than women — or so it might seem.

Divorce Can Impact Your Taxes

One of the more obvious financial ways divorce shows up is in your taxes. One of the benefits of marriage is that two people can pool their resources and assets, theoretically making it easier to get through life together. Divorcing couples may be surprised by the financial hit that comes with no longer sharing life with a partner, especially in April of every year.

The division of assets and resources comes with its own tax-related implications. Instead of filing jointly, two individuals who are not divorced by December 31 of the previous year will begin to file their taxes separately; the joint option offers the lower combined tax, but that doesn't necessarily correlate to a higher or lower tax rate for individuals.

If you are divorced before December 31 of the previous year, you'll have to file as Single or Head of Household. The latter offers a higher standard deduction, but comes with a few requirements (exes must not have lived together for the last six months of the taxable year, the individual must have been responsible for maintaining the home, and the home must have been the primary residence of a minor child).

Why Car and Renters Insurance Increases After Divorce

People who are in the middle of a divorce may also be surprised to find that their renters and car insurance rates have increased. Janet Ruiz, the Director of Strategic Communication at the Insurance Information Institute, told Men's Journal that these rates don't automatically rise because of divorce, but that they are impacted by "the life changes surrounding a divorce," which influence what individuals are tasked with paying.

For example, divorced drivers "may see modest increases mainly because they typically lose married‑driver and multi‑vehicle discounts," Ruiz explained. "Studies show that married drivers tend to file fewer claims and are often rated as lower risk, which is why—on average—auto premiums for divorced drivers tend to be higher, at times by roughly 10–15%, depending on location, driving record, and other personal factors."

Ruiz also noted that other factors, such as credit, address changes, commute patterns, and vehicle usage "tend to play a larger role in determining the final rate."

Divorce can also impact your homeowners or renters insurance, Ruiz added, due to a change in living arrangements. "If one person keeps the home, the policy must be updated to reflect the correct owner and occupant, which can affect the premium because insurers base rates on property value, condition, and the policyholder’s updated profile," she said. "If someone moves to a rental, renters insurance premiums will depend on the new property’s location, coverage needs, and deductibles."

Christina Shaw, an Allstate agency owner, agreed. "Divorce itself does not make someone a higher-risk customer, and it is not used as a pricing factor," she explained to Fast Company. "At Allstate, rates do not change because a person becomes divorced. Instead, any premium differences typically come from the practical effects of splitting one household into two, such as losing shared discounts, changing addresses, or updating mileage and usage, which can influence individual risk profiles."

Related: Olympian Ryan Lochte's Ex Breaks Her Silence, Blames Him for Their Divorce