For 70 years, spousal support, also known as alimony, was taxed a certain way. For the payee, it was taxable income. For the payor, it was deductible. As of January 1st, 2019, all of that has changed thanks to the Tax Cuts and Jobs Act. Spousal support payments are no longer deductible for the payor, nor are they taxable income for the payee.
A Big Impact On Divorce Cases
According to an article from CNBC, the change caused a rush to finalize divorces before the start of the new year. Some have argued that the change will make divorce harder. The ability to deduct alimony payments represented a potentially substantial amount of money that will no longer be in play without the deduction.
However, the article points out that there are other tax changes that should be taken into account when going through the divorce process, and these changes could be beneficial in some circumstances. For example, the cap on mortgage interest deductions has been lowered, which may need to be considered when ascertaining what will be done with the family home. Additionally, the child tax credit has increased, which may need to be taken into account when making child custody arrangements.
Ultimately, the changes to the tax rules do not necessarily mean that divorce is any harder than it was previously. Hubert Gilroy and Petra Gross of [nap_names id=”FIRM-NAME-1″] understand the tax ramifications associated with spousal support and will take them account when offering guidance during the divorce process.
Carlisle, PA – The National Board of Trial Advocacy (NBTA) is pleased to announce that George B. Faller, Jr. of the law firm, Martson Law Offices, has successfully achieved recertification as a civil trial advocate. The NBTA was formed out of a strong conviction that both the law profession and its clients would benefit from […]
Christopher E. Rice of Martson Law Offices in Carlisle, Pennsylvania, was recently elected School Board President of Saint Patrick School in Carlisle, PA! Chris has served on the school board for 6 years and has been involved in a variety of ways in the extracurricular activities offered by the school. Chris has been with Martson […]
George B. Faller, Jr., Shareholder at Martson Law Offices, has been selected to the 2021 Pennsylvania Super Lawyers list. No more than five percent of the lawyers in the state are selected by Super Lawyers. Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who […]
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