New Tax Law May Impact Divorces

Divorce is, in general, a contentious process. While this is not always the case, it is the most common way the process turns out. It’s natural enough that the parties involved would struggle to agree on divorce terms and dissolve their union permanently, however a new tax law stands to increase the bitterness between divorcing parties by quite a bit.

The Status of Alimony

Out of all of the potentially sour aspects a divorce contains, alimony is perhaps one of the acridest. The individuals paying often resent the loss of income and the individuals receiving it often feel as though they need more to survive. It is sometimes possible to ease this conflict by reminding individuals paying alimony that they are able to write it off on their taxes as taxable income. This often helped settle divorce cases and allowed spouses to agree on a support figure.

Thanks to a new tax law signed by the President in 2017, however, this is no longer the case. This new law eliminates this particular deduction and will affect new divorces moving forward in 2018. Because alimony is no longer able to be written off, the person paying support will find themselves taxed on higher income while the individual receiving support is likely to receive less than they might otherwise have been granted. Both parties in the divorce are harmed by this law, and it is likely that it will increase the amount of conflict present in an already contentious process.

What is alimony?

Alimony, also known as spousal support or spousal maintenance, is money awarded to one spouse during divorce proceedings to be paid by the other spouse. Spouse A might be awarded $500 every month in alimony, for example, which Spouse B is expected to pay. These payments are generally awarded to the spouse who earns less money in the marriage in order to help them maintain their standard of living. This kind of payment can be vital to the recipient, especially in situations where the individual in question is ill and unable to work.

How will the new law impact divorces?

Because the new law eliminates the ability to deduct alimony payments, it is likely that the alimony awarded will be less. Even beyond that, however, the new law stands to significantly increase the tension and conflict throughout the divorce proceedings in general. There will be few ways to help soften the blow of alimony for either party, and both individuals are likely to be upset with the amount awarded.

In order to help ensure that your divorce proceeds as planned, and your alimony is reasonable, whether you are paying it or receiving it, it is important to reach out to an experienced divorce attorney. They understand the new law and can work with you to present your case in the most efficient way possible. The attorneys at Walters Law Group, LLC., can help.