As one of many married people across New York who believes divorce is in your near future, you may be trying to get your affairs in order so that you can navigate the separation and make the split as seamless as possible. While divorcing your spouse alters many aspects of your life, recent tax changes have also impacted how divorced parties file taxes, and the more you understand about these changes, the less likely you will be to get an unpleasant surprise when you file. Attorney Robert G. Smith, PLLC, recognizes that those who divorce in 2019 or later will face numerous tax implications, and he has helped many people navigate this and other issues relating to divorce.
According to Forbes, new tax laws have impacted the way you or your former partner will handle alimony payments, if applicable, when you file this year’s taxes or others moving forward. Until this year, people who divorced and then paid alimony to their former spouses could deduct the amount paid from their taxable income. The person on the receiving end of the alimony payments, meanwhile, would include the money received when reporting his or her taxable income.
Starting this year, though, this no longer applies. The person paying alimony will no longer be able to write off the amount paid, and, as you can probably imagine, this may lead to additional challenges for those seeking alimony. Why? Because there is really no benefit to paying alimony any longer, it is reasonable to assume that those asked to pay alimony will fight tooth and nail to avoid doing so.
Another important tax change worth noting that takes effect this year is the manner in which parents benefit, tax-wise, from having children. Until this year, children were typically substantial tax deductions, but the old exemption you would get for each child you have no longer applies. Parents can still get child tax credits for each child, though, and this credit typically goes to the custodial parent, unless both parents agree to other terms. You can learn more about this topic on our webpage.