Doing away with alimony tax deductions to affect the wealthy

| Jul 27, 2018 | Uncategorized

If you’ve thought about walking away from your marriage, then the year to do so may be 2018. If you’re someone who has a sizable investment portfolio, an executive’s salary or other valuable assets, then you’ll want to consider how the change in spousal support laws at the end of the year may affect you.

President Donald Trump’s new tax reform bill will go into effect on Jan. 1, 2019. Once it does, any spouse ordered to pay alimony will no longer be able to take a tax deduction for his or her payment as he or she has been able to do during previous years.

Husbands or wives ordered to pay spousal support before the final day of 2018 need not worry. They will continue to be able to take alimony payment deductions when filing their income taxes each year.

If you happen to wait and file for divorce after the new year begins, then you may find yourself having to make spousal support payments for as long as 20 years. This only applies in those jurisdictions where judges are allowed to award long-term alimony payments. If you live in one of these places, then you may find yourself losing a large portion of your salary without being able to document the loss on your taxes.

Since the law is slated to hurt wealthy individuals in the wallet, many legal and financial analysts argue that divorces could become even more contentious in the future. They note that high-profile spouses may not be as willing as they once were to offer up alimony to their ex since they can’t take a deduction for it. This, in turn, may have an impact on child support payments as well.

Negotiating a settlement in a divorce case when there are various complex or valuable assets can take time. Only a few months are left in the year before spousal support tax deduction options change. You’ll want to have an experienced Kissimmee alimony attorney on your side if you plan on your case being handled as efficiently as possible by the end of the year.

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