Starting on January 1, tax laws that pertain to the taxation of alimony will change. Divorce professionals believe that these changes could make it less likely that couples will be willing and able to negotiate on the issue of spousal support. Ultimately, this could lead to more contentious divorces that otherwise could be resolved through discussions and negotiations.
What do new tax laws mean for you?
Because of these new changes, many Kentucky couples are working to finalize their divorces before the end of the year. However, this may not be an option for you. If you are planning to move forward with the divorce process after the first of the year, it can helpful to learn more about these changes and what they can mean for your post-divorce financial situation.
For 75 years, the spouse paying spousal support was able to deduct that amount for tax purposes. This will change, however, and it may be helpful for you to understand the following facts:
- The payer will no longer be able to deduct the amount he or she is paying to the lesser-earning spouse.
- The intent of the new tax changes is to generate more tax revenue; estimates suggest that it could amount to several billion dollars.
- Taking away the tax break for the paying spouse may take away the incentive for couples to negotiate on spousal support as they finalize the divorce agreement.
The intent of spousal support is to lessen the financial strain that a divorce can bring on a lesser-earning spouse. Whether you will need support after your divorce or you are worried about your ability to pay, you have the right to pursue a final settlement that will allow you stability and security for years to come.
Your post-divorce future is at stake
Divorce will change your life and your finances, and it is critical to pursue a resolution that does not leave you with unmanageable financial burdens or with insufficient support. It may be beneficial for you to seek a complete evaluation of your case in order to understand what to expect before you move forward with divorce.