“2018 Tax Planning in Divorces with Alimony/Spousal Support Payments”
2018 TAX PLANNING IN DIVORCES WITH ALIMONY/SPOUSAL SUPPORT PAYMENTS
In the recent past, it has generally been beneficial for both parties to file a joint tax return in any year during which divorce proceedings are underway. For example: the parties frequently delay entry of the final Judgment until January in order to take advantage of the reduced tax burden created by claiming married filing jointly status for the immediate prior year. This general rule may change this year (2018) given the Tax Reform Act.
Beginning with court orders entered after 2018, alimony will no longer be deductible to the payer. This is a significant change and will affect divorce proceedings starting in 2019.
Given this change, the party paying alimony/spousal support in a Judgment of Divorce, taking a long-term approach will want to complete the divorce in 2018, in order to take advantage of this tax benefit going forward into future years.
Given this change in the tax code, the payer of alimony may wish to complete the case before the end of 2018, without regard to other potential short term tax consequences. If you wish to explore this issue further, please contact one of our divorce attorneys at Damon, Ver Merris, Boyko & Witte, PLC by calling (616) 975-9951 to discuss alimony/spousal support and income tax consequences.
We are here to help – Curtis R. Witte – February 5, 2018
While this posting originates from a law office, none of the contents should, in any way, be considered legal advice. If you have not signed a retention letter describing the legal services to be provided and the amount to be paid for such services, you are not a client of this firm.
While this posting originates from a law office, none of the contents should, in any way, be considered legal advice. If you have not signed a retention letter describing the legal services to be provided and the amount to be paid for such services, you are not a client of this firm.