Some Missouri couples may seek to move up their plans for divorce following changes to American tax law signed into effect by President Donald Trump in December 2017 that are scheduled for implementation beginning in 2019. Annually, approximately 800,000 couples across the country get divorced. However, in 2018, that number could be higher as people act quickly to avoid the implementation of the changes, which could make it more costly to pay alimony.
Divorce lawyers across the country have stated that they have seen increased numbers of inquiries and requests for consultation after Congress passed the tax law at the end of 2017. People with significant assets who may be expected to pay substantial amounts of spousal support have been particularly concerned about the change. Under the existing tax laws, the person who pays alimony can deduct a portion of that expense from his or her annual tax filings.
However, this will change in 2019. Payment of spousal support will no longer be considered tax-deductible, making every payment more expensive. However, even though the new law will be in effect for all divorces that are finalized from 2019 onwards, all existing spousal support arrangements, including those finalized in 2018, will continue to function under the terms of the older tax laws.
For recipients of spousal support, the landscape will change. Currently, they must pay taxes on the alimony they receive as part of their annual filing. Under the new law, spousal support income will no longer be taxed.
People who are concerned about the new tax law’s impact on the end of their marriages can consult with a family law attorney to determine the best course of action moving forward. A divorce lawyer can represent his or her clients effectively to achieve a fair settlement in regards to spousal support, child custody and other key issues.