New Tax Laws Impact on Divorce

Many couples and financial professionals are scrambling to get written agreements regarding alimony payments done before new tax rules set in in the new year. After Dec. 31, 2018, alimony payments will no longer be tax-deductible for the payor and considered taxable income for the payee – changing rules in place for more than 70 years. The changes will make for less money to go around, which could hurt women, who are already financially vulnerable following a split. These laws arise from the Tax Cuts and Jobs Act of 2018. Under pre 2019 rules, alimony payments were tax-deductible for the payor and taxable income for the payee. Once the clock struck 2019, however, those rules no longer apply. This means that negotiations and tactics once relied upon by attorneys must now be replaced by different and new approaches and thoughts. When you are faced with the prospect of a divorce make sure to find an attorney who is experienced in the skills necessary for saving you money!

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