The New Tax Law Complicates Divorce & Alimony
The new tax bill has received a lot of attention in the media. However, many do not realize that it will have implications on divorce and alimony payments (in addition to tax deductions). Below, we discuss some of the ramifications of the law in greater detail, with a focus on how it complicates divorce. Alimony Payments Are No Longer Deductible Perhaps most notably, the Tax Cuts and Jobs Act made significant changes to alimony, eliminating the ability for the alimony payer to deduct the payments from his or taxes, and the mandate for the receiver to pay taxes on alimony payments as income, as applied to divorces entered into after 2018. Being able to deduct alimony payments was helpful to many families, as it allowed the spouse in the higher tax bracket to transfer money to the spouse in the lower tax bracket, thus allowing for settlements that would pave the way for each party to receive a benefit. Effects on Payments & Divorce Under the new law, because the alimony payer’s income will be taxed at a higher rate, there will be less money to divide overall between spouses, with more money in general going to the government in the form of taxes. In addition, many state alimony laws were specifically written with the assumption that alimony payments would be deductible by the payer, and taxed to the payee; thus, states are also now trying to figure out how to implement the new system. The recipient of alimony could effectively end up with more disposable income than the payer; at least, until the various states adjust their alimony payment guidelines. This is not only going to affect how one household splits into two, but how attorneys working on family law cases like these advocate for particular percentages in the courts. Because the payee stands to benefit from the new tax law, it is possible that advantages can be gained for the payee by delaying the divorce process (starting in 2019, when this law becomes effective for divorces). Similarly, the tax bill hurts the payer, and thus there could be incentive on the payer’s part to rush through the divorce. Speak With an Experienced Florida Family Law Attorney If you are going through or contemplating divorce, it is essential that you speak with an experienced divorce and alimony attorney as soon as possible. There are considerable ramifications depending upon when you file, and you should be aware of all the various relevant factors throughout the process. Only consulting with an attorney who understands the tax ramifications of the new law can help put your mind at ease. If you live in Florida, contact the experienced family law attorneys at HD Law Partners to set up a consultation and find out how we can help. Resource: accountingtoday.com/news/tax-reform-complicates-divorce Tags: Florida Family Law Attorney, Florida Family Law Attorneys Posted in Alimony, Divorce | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us