ALERT: The new tax plan Congress passed in Dec. 2017 will have a variety of lasting consequences, and one area that will feel this is spousal support. The new tax plan abolishes a deduction on alimony that’s been in place for more than 70 years.
Spousal support, sometimes called alimony, is likely an issue whenever there is a significant difference in personal income between the two spouses. Spousal support designed to provide the lower-income spouse with money for living expenses regardless of gender. The spouse that receives support will pay federal and state income taxes on it, and the spouse making support payments will be entitled to a tax deduction.
The existence, amount and duration of monthly spousal support payments will be defined either by the court or a settlement agreement.Courts make determinations regarding spousal support after considering many factors such as the length of the marriage, the standard of living during the marriage, as well as the age, health, earning capacity and job histories of both individuals.
The issue of spousal support modification can have a profound impact on how they live day-to-day and plan for retirement. In many of our cases, we must negotiate or litigate to achieve a minimization or termination of this sometimes oppressive obligation in our client’s best interest.
The massive new tax plan Congress passed late last year is going to have wide-reaching impact. Rates are set to change, new cuts take effect, and you may even be able to deduct your private jet. In short, sweeping transformations are in store. Its fingers will reach into all aspects of life, including divorce.
The new tax plan will have a variety of lasting consequences, and one area that will feel this the most is spousal support.