There has been much discussion concerning the upcoming changes in the tax laws and how they will impact divorce settlements beginning in 2019. The Internal Revenue Code will no longer allow those paying alimony to deduct the payment from their income for tax purposes. While the recipient will no longer have to pay taxes on the amounts received, this is not expected to be a financial win. Florida residents who are concerned about how these changes will directly impact them should consult family law attorney.
Many lawyers have expressed their concerns over how the upcoming changes are already affecting divorcing couples. Because the tax changes will generate more revenue for the federal government over the next 10 years, this translates into taxpayers shouldering more of the tax burden. Couples are now rushing to finalize their divorces before the end of the year in order to take advantage of the existing law, which may mean they are making hasty concessions.
It is feared that the change regarding the deductibility of alimony payments will have a negative impact on lower-income families who rely on these payments. Since the paying spouse will no longer receive any tax advantages, he or she will be much less inclined to agree to any alimony. Though more and more women are paying spousal support, it has traditionally been women who suffer financially after a divorce and the new tax laws may only add to the struggles to stay afloat financially.
Many are also worried that children will also be negatively impacted by this change since alimony and child support are often calculated together during divorce negotiations. This could lead to even more pressure for financially-disadvantaged families. The fact that alimony payments will not be taxable income is not expected to bring any relief since overall payments will likely be lower. Florida residents who are worried about how all of these changes will impact their divorce filing may consult with an experienced attorney who can help structure their settlement to best meet their families’ financial needs.