Navigating the world of divorce / family law can sometimes feel overwhelming. Trying to understand the rules regarding items such as alimony, child support, child custody, and the splitting of assets seems like a daunting task. Understanding the ins and outs of family and divorce law is compounded by constant legislative changes, adding more confusion to the situation. Now, 2019 is just around the corner, and if you are mid-divorce there are new laws you need to be aware of regarding alimony that take effect as of January 1, 2019.
Current alimony law is set up so that the recipient of alimony pays taxes, while the payor of the alimony writes it off on their taxes unless otherwise designated in the divorce decree. After January 1, 2019, alimony will be non-taxable for the recipient and non-deductible for the alimony payor. This is a huge change from the previous tax laws regarding alimony payments.
How Does This Affect My Divorce?
Previous alimony law was beneficial for the payor and payee. The payor got to lower their tax burden writing off alimony on their taxes. The payee paid taxes just as they would on job income, and also enjoyed the benefit of being able to pay lower taxes by contributing their alimony payments to an IRA.
In 2019, the payor will have to shoulder the full tax burden of the alimony payments, even though they do not get the benefit of the income. The payee will no longer be able to automatically contribute alimony payments to IRAs and enjoy the tax benefits of doing so. In effect, alimony will be treated much like child support is, with the payor bearing the full brunt of the taxes.
My Divorce is Final. Will This Affect Me?
You may be wondering if this law will affect you if you are already divorced. If your divorce is final before December 31, 2018, you will not be affected. The law is not retroactive, and you will continue claiming alimony as you always have.
I Am Divorcing in 2019. Should I Contact a Divorce Lawyer About the Changes?
It is important that you do not go it alone if you are likely to be ordered to pay alimony. If you are thinking about divorce, contact K/S Law today at 561-939-8042 for a consultation with a family lawyer in Boca Raton.