Most Florida residents are aware of the recently passed Republican tax bill. Some of those changes will go into effect in the new year, while others have a delayed start. One of the biggest changes in the new tax structure is the fact that spouses who pay alimony will soon lose the ability to deduct those payments from their taxable income. That is expected to change the focus of a spousal support law firm in order to offset tax losses.
Currently, spouses who pay spousal support are allowed to deduct that expense from their taxable income. That means lower taxes on their end, while the receiving spouse is expected to claim spousal support as income. The receiving spouse, therefore, has a larger tax obligation than he or she would have if alimony was not a factor.
The new plan eliminates the tax deduction and also the requirement to pay taxes on received support. Critics of the change believe that spouses will likely see less alimony once the changes take effect. Negotiations may also become far more complicated and contentious as couples struggle to find a fair settlement.
For those in Florida who know that divorce is on the horizon, it may be comforting to know that these changes will only impact couples who divorce in 2019. That means there’s no need to rush out and file right away. Working with an experienced spousal support law firm can make it easier to navigate these changes and reach a fair divorce settlement agreement.
Source: New York Post, “Here’s how the tax plan could change divorce in a big way“, Dec. 22, 2017