This week, the new tax bill for the United States will be signed into legislation. The bill, known as the Tax Cuts and Jobs Act is bringing changes to many different tax policies ranging from mortgages to moving expenses and even to divorce and alimony. Beginning on January 1, 2018, any divorces that take place and require an alimony obligation will be subject to different tax consequences than prior to 2018.
The current tax laws for alimony state that the individual who is obligated to make spousal support payments can count the payments towards deductions. In addition, the spouse who receives alimony payments is permitted to count the money they receive as part of their annual income.
However, with the start of the new year comes changes to these rule. Any divorce decrees that are signed on or after January 1, 2018, will be taxed at the expense of the individual who is obligated to make the alimony payments. In addition, the payments will no longer be considered part of the recipient’s gross income. Of course, alimony is not applicable to every divorce so it is important to consult with an experienced divorce attorney to see how these changes may impact you. If you require the services of an experienced divorce attorney, schedule a consultation with our law firm today.
If you are in need of experienced and dedicated legal counsel, please contact The Penichet Firm today and we will be happy to assist you in all of your divorce, family, and criminal law matters.