Recently, the United States signed a new tax bill into law. The bill impacts a wide variety of matters, one of those being divorces and alimony. Any divorce or separation agreements that are signed in 2019 will be subject to the new laws if alimony is a factor in that agreement. Alimony is when one spouse provides the other with compensation to allow them to keep the same standard of living after the divorce or reimburse them for their monetary support during the marriage. Over 243,000 people in the United States received alimony payments in 2016.
Before the bill, the individual who had to make alimony payments were able to deduct the payments in their taxes and the individual who received alimony payments had to include the money in their income for tax purposes. Now, the taxes are the other way around. The individual who receives the alimony payments will not have to include it in their annual income and therefore, will not be taxed. The individual who makes the alimony payments will have to include it in their income, will no longer be able to deduct the payments and instead, will be taxed on it.
If you have questions about how you may be impacted, contact us today.
Leslye M. Schlesinger serves Rockland and Westchester County with compassion and integrity. With over 30 years of experience guiding clients through matrimony law, she now focuses on helping clients avoid litigation through alternative dispute resolution, including collaborative divorce and mediation. If you need an effective and committed attorney, contact Leslye M. Schlesinger for a consultation.