This year the federal government passed an overhaul of the tax laws and those changes could have big consequences on individuals who may wish to divorce in the future. One of the ways that the changes to the tax laws may affect divorcing parties is through new provisions that prevent alimony payers from deducting their payments from income taxes.
Individuals who finalize their divorces by the end of 2018 may continue to do this, but parties that wait until 2019 may not take advantage of this tax benefit. Experts in the legal field have suggested that when alimony payers are stopped from deducting their payments from their taxes, negotiating alimony settlements may become more challenging.
For parties who plan to request alimony in their divorces, securing a divorce decree in 2018 may be a good way to maximize their negotiating power. Individuals who will end up paying alimony once their divorces are over may not be as willing to provide as big of alimony contributions if they can no longer write off their payments.
Whether alimony will have different tax implications for a couple may or may not impact when they choose to file for divorce. However, it is important that they do understand that the law can change and that those changes may make their divorces more costly. Getting the right information about divorce law is a good way for a person to stay abreast of the changes that may impact their divorce proceedings, including any issues involving alimony.
