If You’re Thinking About Alimony, Get That Order Signed Before The End Of The Year!
There were a lot of changes to our federal tax code with the passage of the Tax Cuts andbrJobs Acts of 2017 (TCJA). You may have read about this in the news or on social media. However, did you know that the tax treatment of alimony is greatly affected by this overhaul?
One important change to note in the Tax Cuts and Jobs Act of 2017 is that alimony payments will no longer be deductible by the paying spouse on his or her income tax return for divorce or separation instruments executed after December 31, 2018. Depending on the paying individual's particular situation, this may greatly affect the overall taxes that are ultimately owed to the IRS. In turn, the receiving individual would no longer report payment received as income. In certain situations, the receiving spouse may actually benefit from having to report this amount as income.
Simply put, talk to your attorney ASAP about finalizing your divorce if you are contemplating including an alimony provision in your divorce decree! JusticebrLaw Firm also strongly encourages all of our clients to at least meet with a qualified tax advisor in order to understand and maximize benefits under the TCJA.
For a link to the full text of the TCJA, please click here.
Disclaimer: Justice Law Firm does not give tax advice. Please consult a qualified tax advisor for any specific or general questions.
Written By: Tracey Justice
