How Is The New Tax Bill Going To Affect Alimony In 2019?

Affordable Divorce Attorney In Orlando FL

The new tax bill that is effective from 1st Jan 2019 will affect the payment or receipt of alimony. That is only for those who divorce after 31st Dec 2018 as it is not retroactive. The effects may be considered good or bad depending on whether you’re more likely to be paying or receiving alimony. Depending on these consequences, it may be in your best interests to divorce before or after 31st Dec 2018. That is if you are seriously considering divorce.

The new tax bill makes it more or less similar to the current tax law for child support payments. Under the current tax law, child support isn’t considered as taxable income for recipients nor as tax deduction for payers. But the current law recognizes alimony as a tax deduction by payers and taxable income for recipients. Once the new tax bill goes into effect that will not be the case. Instead, alimony will be treated in the same way as child support is under the current law.

So, for those likely to pay alimony, the new tax bill will not be as favorable as the current one. That is because your alimony payments will not be tax deductible anymore. Instead, you’ll have to pay tax for that amount as well. Therefore, it is best to hasten and finalize the divorce before 31st Dec 2018 in that case.

But if you are instead on the receiving end, it may be wiser to divorce in 2019. That is because under the new law you will not be required to report alimony as taxable income. Instead, you get to keep all of it tax-free.

Now is the time to consult your Divorce Attorney In Orlando FL, Erin Morse. Find out the best course of action to take. Contact the Law Office of Erin Morse now to get an appointment right away.

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