Heather L. Locus writer for Forbes is warning people to finalize their divorce before the new year and the new tax laws of 2019. Balancing a healthy family during a divorce is never easy and the new tax laws have added an additional layer of complexity and urgency. While it is extremely important you do not feel pressured to settle, it is equally important you educate yourself on laws and tax codes which may have a lasting impact on your family’s future financial health.
- Move Fast To Control Taxes On Alimony
Current law says alimony is a deductible tax for the paying spouse and taxable for the receiving spouse. Unfortunately, 2019 is changing the savings from this agreement.
- The change is permanent and will likely result in less alimony being paid to the receiving spouse. It’s estimated the elimination of this “divorce subsidy” will raise an additional $6.9 billion over the next decade for the government – meaning $6.9 billion less in divorced individuals’ pockets.
- It may result in non-working divorced spouses no longer being eligible to make IRA/Roth IRA contributions.
- Tax Benefits Of The Family Home Are Changing
What’s going on with your home after the divorce is final? Well, the new tax laws may have decided for you. The new law is making it more expensive to own, sell, and acquire a home so ensure the best value of your home before it’s too late.
- Kids Are No Longer As Great As Of A Tax Deduction
The new tax code eliminates the personal exemption amount for tax years 2018 – 2025, which means that you don’t get a multiplier of kids as a deduction on your tax return.
- Pre- And Post-Nuptial Agreements May Be In Jeopardy
Couples with pre or post nuptial agreements should have their agreements reviewed to understand the impact of the new law. Any alimony provisions likely assumed deductible could change and there may be significant unintended consequences with the new law.
To learn more about 2019’s new tax laws and finalizing your divorce visit David Veliz at Veliz Katz Law or read the full article here: