Clean off All Soil Clinging to the Bearded Iris Rhizomes

Once you have the bearded iris rhizomes lifted, shake off any loose soil. Rinse off any remaining soil with a garden hose. If you don't have space to do this in the garden, it is sometimes easier and neater to do it on a tarp. Rising off the soil will allow you to better see the rhizomes and roots, to inspect for damage.
Once the rhizomes are cleaned, you can separate the individual rhizomes from one another. Don't break them apart, just loosen the already separate sections.

Cut the Bearded Iris leaves to about 6 inches

Once the rhizomes are clean, cut the foliage to about 6 inches. Cutting the fan of leaves connected to a lifted iris rhizome makes the plant easier to work with when dividing and replanting and helps prevent water loss while the plant is becoming re-established. The fan does not need to be cut symmetrically. Some leaves may be damaged and will need to be cut shorter than 6 inches.

Inspect the Bearded Iris Rhizomes for Borer Damage and Soft Rot

Once the bearded iris rhizomes are clean, look for small to medium holes, like the one on the rhizome above left. These are telltale signs of borer damage. If your bearded iris leaves have dark streaks in them, you probably have iris borers, so look closely.
Also look for soft spots like the front section of the above right rhizome. This is another common iris problem called soft rot.

Using a sharp knife or pruners, remove any traces of either iris borer damage or soft rot and dispose of these segments of rhizome. Soft rot spreads easily, so disinfect your cutting tool with denatured alcohol between cuts, to prevent furthur contamination.

Dividing Your Bearded Iris

Now you are ready to divide the rhizomes. You will see natural places to make a split, such as where the rhizome has forked. Study the rhizome and make sure each section you have chosen will wind up being at least 3 inches long and will have healthy roots growing from it. Then go ahead and make a clean cut through the rhizome, using the same sharp, disinfected knife or pruner.

Getting the Garden Ready to Re-plant Bearded Iris Divisions

The final step is re-planting your bearded iris. Choose a full sun location and start by digging a shallow hole that will be wide enough to spread out the rhizome's roots. Make the hole about 2-3 inches deep, then create a mound in the center of the hole to just about soil level, as shown above.

Re-planting Bearded Iris Divisions

Soak the soil in the planting hole. Then take a rhizome division and place it in the center of the mound. Spread the roots around and down the mound. Cover the division with soil, being careful not to bury the rhizome with more than an inch or 2 of soil. Remember, it will probably settle a bit lower and bearded iris will rot and certainly won't bloom, if buried too deeply.
Water well and do so weekly until you start to notice new growth. Then enjoy for another couple of years.