The implications of the Tax Reform Law would affect almost every aspect of American living, including divorce. Alimony, for instance, is set to change under the new ruling.
It is typically the higher-earning spouse which pays the alimony; this difference in tax brackets provides benefits to both parties, especially to the recipient. Under the previous law, an ex-spouse who pays spousal support is legally allowed to deduct the payment from his/her taxes, while the ex-spouse who receives the money has to include this in his/her taxable income. This deduction from the payer’s taxes is said to contribute significantly to the agreement of providing alimony to the payee.
However, under the new law, alimony will no longer be deducted from the payer and the payee will no longer be paying taxes on it. The concern is in the amount of alimony that the payer can provide, since his/her ability to pay can be limited by tax concerns, given other expenses such as child support. As a result, the taxation shift might leave the recipient with less spousal support.
With the changes in alimony to take effect in 2019, Yahoo Finance predicts that there might be a rush of divorces this year. Ex-spouses paying alimony might have to file a divorce early in order to get the tax cut. On the other hand, alimony recipients in some states have the incentive to prolong the separation after December 31, 2018 for the tax advantage. This would mean difficulties in negotiations and settlements between both parties, making divorce even a harder process, since the tax deduction for the payer’s part was most often used as a bargaining chip.
With the changes in alimony treatment under the new law, you will need the services of an expert law attorney to guide you throughout the process. Divorce has other aspects that also need careful consideration, and Atty. Mellany Marquez-Kelly can help you create resolutions that will protect you and your children’s interest. With her thorough knowledge of Florida law, Atty. Marquez-Kelly has helped many residents in Southwest Florida. For an experienced family law attorney in Fort Myers, Florida and its surrounding areas, call Atty. Marquez-Kelly now at 239-214-0403.