To compensate for sweeping tax cuts, the GOP’s “Tax Cuts and Jobs Act” will rescind alimony deductions, hurting all but the very affluent.
What we call the divorce penalty, will affect anyone who divorces or signs a separation agreement before 2019.
Previously, every dollar in alimony reduced the payer’s taxable income by the same amount. Critics of the tax bill feel doing away with the deduction will not only increase the financial burden of the supporting ex, but could very well lead to additional legal disputes.
While the rescinding of the alimony deductions will make it tougher on the average divorcee, it is unlikely to dissuade any one from following through with their divorce or other family law cases.
The GOP Tax Bill will be most detrimental to families struggling to make ends meet. Eliminating the benefit of the alimony, estimates say tax deduction could cost such families an additional $3,000- $5,000 a year
Family law professionals are convinced it will have negative impact on future financial standings of divorcing parties, that it is likely to increase the family’s financial burden, and will reduce the much needed funds once available to the divorced spouses and their children.
Most family law negotiations are premised upon alimony payment arrangements. Without a doubt this new unfavorable dynamic will change the landscape of family law negotiations and adversely challenge, not only how family law and divorce settlements play out into the future, but also the economic well being of the average family in America.
Charles M. Green is a highly experienced family law specialist with financial expertise as a former CPA for high profile East Coast financial firms. Our skilled and compassionate family law team is here to assist with any questions or concerns regarding your legal scenario. Give us a call today.
Charles M. Green is Certified as a Family Law Specialist through the Board of Legal Specialization of the State Bar of California.
A Certified Family Law Specialist must pass an extensive written examination in the variety of subjects that are family law, be approved by a peer review process and show proficiency in Family Law by having represented clients in a sufficient number of Family Law cases with varying degrees of complexity. Continuing education is required to maintain this specialty designation.
Charles Green also has prior experience as a Certified Public Accountant. This combination of legal and financial experience and education makes Charles M. Green uniquely qualified to represent clients in the most complex of financial issues that are found in…