Divorce is incredibly stressful, and it may be made more so by the new tax laws. We’ve discussed the changes to alimony laws in past articles, and now divorce attorneys are predicting that divorce may be even more stressful thanks to the tax plan that passed earlier this year.
Over the last seven decades, the spouse who was earning a higher income could deduct the alimony they paid come tax time. The spouse receiving the payments was taxed at 15 percent. The new tax law puts that in reverse. Starting in 2019, the spouse who earns the highest income and pays alimony will be taxed on those payments. The spouse who receives alimony will pay no tax at all on the “income.”
It is presumed that these laws will have couples who have only been considering splitting take the leap. Couples who divorce this year will not be subject to the new laws. Those who put their split off until next year will be. Divorce attorneys say that these laws will affect higher earning couples the most. Lower earning couples may not be as affected as they believe they will be.
Attorneys also point out that even those who are happily married should pay attention. If a prenup is involved, it is based on old tax laws. Any couple who is staying together but has a prenup should have their contract evaluated and possibly rewritten.
If you need assistance with a divorce or other family issue in Orlando, reach out to our team. We will review your needs and advise you of your legal rights and options. Call today to schedule a case evaluation.