Is your marriage slowly breaking down? It is a sad and unfortunate reality that many couples have to face, but some choose to stick it out for a little longer, hoping for a turn around. Each couple that chooses to stay together does so for their own reasons, and sometimes those reasons are financial. Now, the latest tweak to tax law may give those couples a better reason to go ahead and get divorced in 2018.
Could Taxes Be the Reason You Get Divorced In 2018?
In 2019, the sweeping tax plan signed into law by President Donald Trump will eliminate some people’s ability to deduct alimony from their taxes. Under the current tax code, if you pay alimony or spousal support, you are allowed to deduct those payments from your taxes. In many cases, this deduction could be worth thousands of dollars, but that will change in 2019.
The ability to claim spousal payments as a deduction will end at the end of the year. This means that some taxpayers will miss out on deductions that they had previously planned on when they put their financial plan together. And so, some people are scrambling to get their divorce settlements finalized before the end of the year. However, not every potential divorcee should rush to get their divorce done before December 31st.
If you expect to receive alimony or spousal support after your divorce is finalized, you may want to delay things till 2019. That’s because the new tax code will exempt people from paying taxes on the payments they receive from their ex-spouse. This could give many potential divorcees a reason to delay their divorce settlement until after January 31st.
So, which way should you go if you’re considering divorce? There are many issues that you must contend with when getting a divorce, and these factors can influence the way your divorce should be handled. Consult with an experienced family law attorney that knows the financial implications of these issues.