Should I Wait Until the New Year to File for Divorce?
Are you thinking of leaving your spouse? Are you already in the middle of the divorce process? If so, you might want to speed things up and get your divorce wrapped up before the end of the year. In this blog, we explain why new changes to the tax code will impact divorces that aren’t completed by Dec. 31 of this year.
Last year, Congress passed the Tax Cuts and Jobs Act, which will do away with alimony deductions beginning on Jan. 1, 2019. Under the old tax code, a spouse who was ordered to pay child support could deduct the payments on their federal income taxes. The old tax code also required the spouse who receives alimony to report their monthly payments as part of their taxable income. If you finalize your divorce before Jan. 1, 2019, the new changes will not affect your divorce agreement.
Because of these changes, divorces will be much harder to negotiate. This is because the spouse who has to pay alimony is at risk of having to endure a higher tax burden if the divorce isn’t finalized before the end of the year. Paying spouses will also want to negotiate a smaller spousal support award to offset the increased taxes.
Data collected by the IRS in 2015 shows that nearly 600,000 Americans claimed an alimony deduction on their taxes. If you are likely going to be paying alimony after your divorce is wrapped up, the Tax Cuts and Jobs Act should motivate you to finish your divorce proceedings as soon as possible.
Speak to a St. Augustine Dicorve Attorney
At Albaugh Law Firm, our divorce attorneys are here to guide you through the divorce process and ensure that your rights and interests are fully protected. We are committed to helping clients in St. Augustine and surrounding communities resolve their family law disputes, and we can get started on your case today.