Divorce is a complex process, and the decisions that Florida couples make during this time will impact their lives for years to come. There are financial ramifications to the choices you may have to make in your divorce, such as which spouse should keep the family home or how much alimony you may be able to receive.
There are new tax laws that will be effective in 2018 and 2019, and some of these changes could impact Florida divorces. If you were waiting for the New Year to divorce, you may find it beneficial to learn how some of these changes could have a real impact on your divorce and your post-divorce life. It’s wise to make decisions that are not only smart in your present situation, but will also allow you stability in the future as well.
Tax laws and your divorce
One of the main ways that the new tax changes could affect you is regarding alimony payments. Under the new plan, alimony payments will no longer be tax deductible. That means that the paying spouse will not be able to write them off when he or she does taxes. This change will affect all divorces filed after December 31, 2018. Here are some ways this could make divorce more challenging in the future:
- It may make it less likely that spouses are willing to negotiate together on matters pertaining to alimony payments.
- A spouse may feel more inclined to save money for taxes rather than pay spousal support.
- These issues could increase the complexity and lengthen disputes in a divorce, making them harder to settle.
After December of this year, a paying spouse cannot deduct the cost of alimony from his or her taxable income, but the receiving spouse will not have to pay taxes on it. This is a direct reversal of the current plan’s treatment of alimony payments.
Shielding your future interests
The ultimate goal of your divorce is to preserve your future interests. Whether you believe you have a rightful claim to spousal support payments or you wish to protect yourself from unnecessary financial burdens as a result of your divorce, you have the right to pursue the outcome you want.
If you are planning to divorce this year or next, you would be prudent to seek a full understanding of the ways that the tax laws will impact your future. It can be useful to start with a complete evaluation of your case and an explanation of your options.