2019 Tax Changes Impact Divorce Alimony Settlements
Going through a marital separation or getting a divorce can have dramatic impacts on your manner of living. Depending on the circumstances surrounding your case, you may be entitled to alimony payments, which can help you get back on your feet. However, changes in the tax code that are set to go into effect in 2019 have the potential to dramatically impact these settlements. It is important to understand these changes and how they could affect any divorce settlement you receive.
Are You Entitled to Alimony?
Under Section 61.08 of the Florida Statutes, alimony may be awarded as part of a divorce settlement or order, either on a temporary or permanent basis. These amounts may be negotiated through your divorce attorney and the other parties involved or they may be awarded by the judge in your case.
Alimony, which is often referred to today as spousal support and maintenance, can serve a variety of purposes. It can help bridge the gap in the immediate aftermath of your divorce, allow time for you to get the skills and education you need to re-enter the workforce, or offset the costs and expenses you incur living solo so that you can maintain the standard of living enjoyed during your marriage. Factors that are a consideration in awarding alimony include:
- The length of the marriage;
- The age and health of each spouse;
- Each person’s individual income and earning potential;
- The amount of individual property and assets each owns;
- Whether one made career or educational sacrifices for the sake of the other during the course of the marriage.
Tax implications are generally a factor in alimony negotiations as well. As these amounts previously represented a deduction the paying spouse could take from their yearly federal tax return, this often provided the financial incentive for more generous settlements.
Tax Changes Regarding Alimony Payments
While the Tax Cuts and Jobs Act (TCJA) was put into effect under President Trump in 2017, there are new changes associated with these laws that the Internal Revenue Service (IRS) will be implementing this year. Among these are changes in how alimony payments are considered for tax purposes. For divorces filed in 2019, alimony will no longer be a deductible expense for the paying spouse. Without this savings, there is less incentive to be generous when agreeing to an alimony settlement amount.
However, tax changes impact the receiving spouse as well. As these payments traditionally counted as income that would need to be declared on yearly tax returns, those entitled to spousal support had to contend with potentially heavy tax debts. This is also no longer the case in 2019.
Get Legal Guidance From Our Fort Lauderdale Alimony Attorney
How tax changes impact your rights to alimony depends on your individual situation. At the law firm of attorney Vanessa L. Prieto, you can trust us to provide the legal guidance you need in determining the maximum amount you are entitled to in any divorce settlements. To request a consultation, contact our Fort Lauderdale divorce attorney today.