New Divorce Tax Laws

Divorce is not something anyone ever wants to go through. And, going through it is hard enough on its own that you don’t need any source of added pressure or stress. Unfortunately, however, divorce tax laws are changing. And, in 2019, there are some new laws regarding and affecting divorce. The good news is that, with the right professional help and understanding, navigating these new laws and how they may affect you doesn’t have to be all that difficult.  

Alimony

Sometimes, following a divorce, one person will be required to make alimony payments to the other person. In the past, any alimony that was paid was tax-deductible. And, any alimony received was counted as taxable income.

However, all of this will change in 2019. While this change may not seem like such a big deal, it is likely it will impact how divorce proceedings are conducted. It is likely, for example, that the higher-earning divorcing spouse will fight viciously to pay less in alimony or to not pay any alimony at all since this expense can no longer be written off. Likewise, spouses who are likely to receive alimony will probably fight for more of it since they don’t have to worry about the money being taxable.

If you are in or about to go through a divorce and think that alimony may come into play, speak with a tax professional about how to make this new law work for you, or at least not against you.

Pre-Nuptial and Post-Nuptial Agreements

Whenever new tax changes are made, they have a way of trickling down and affecting other things.

In light of these new laws affecting alimony, old pre-nuptial and post-nuptial agreements may be affected. Therefore, if you are divorcing or planning to divorce, have a financial consultant go over these documents with you to see if and how they will be affected.

Change doesn’t always feel like a good thing, whether it’s in a marriage or in taxes. When change is inevitable, however, your best bet is to try and mitigate the damage with the help of a financial professional.