Alimony Tax Deduction is About to Change
Under the current federal tax law, a spouse receiving alimony must include it as income and pay taxes on the alimony received each year. The spouse paying alimony receives a deductible expense. Certainly a tax deduction for a high income spouse has always been a great incentive to pay alimony. Under the new proposed tax bill, the spouse receiving alimony will no longer have to pay taxes on the money. But the paying spouse will no longer receive the deduction. This change would take effect with all divorce and separation agreements executed beginning January 2019. Consultation with your family law attorney will be necessary in negotiating a settlement which maximizes benefits to both parties.
For more information please contact Carolyn Mirabile at firstname.lastname@example.org or 610.278.1524.
Disclaimer: The contents of this post are for informational purposes only, are not legal advice and do not create an attorney-client relationship.