New Tax Laws & Change to Divorces
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Sweeping tax law reform passed by Congress in late 2017 will have far-reaching consequences, and that includes having an impact on your divorce. For this reason, it’s imperative you reach out to a New York divorce attorney and get help figuring out what these changes will mean for your future. A quality attorney who stays up to date with the latest state laws regarding divorce can help you determine what impact these changes will have on your life and how you should adjust your strategy if you’re in the middle of your own divorce case.
When you call Wisselman, Harounian & Associates, you can trust that a team with decades of legal experience will be fully apprised of the new laws and their implications, and equipped to fight for your rights and strive to protect your best interests, no matter what your family law matter might be. We strive to maintain a higher standard of client service and care, ensuring you receive counsel that listens to your needs and places your goals at the forefront of all our strategic decisions. We’re proud of our reputation as one of the most prominent family law firms and one of the largest matrimonial law teams on Long Island.
Call Wisselman, Harounian & Associates today at (516) 406-8500 to request a complimentary case evaluation and learn more about how your divorce strategy might change as a result of tax legislation being passed.
Changes to Alimony
The largest change that will impact divorce laws pertains to spousal support, or alimony as it’s more often known. In the past, alimony payments were tax-deductible by the paying spouse, and taxed as income for the receiving spouse. This often created a larger deduction for the paying spouse, while allowing the receiving spouse to ultimately pay a lower percentage of taxes on it.
However, while the new tax plan will save the vast majority of Americans money, it eliminates the deduction on alimony paid, and no longer taxes the receiving spouse, which could lead to an increase in money paid in taxes by the paying spouse, who can no longer take advantage of a sizeable deduction. The IRS is also hoping this new arrangement will cut down on the massive discrepancy between the number of people who claim alimony payments on their taxes and the number who claim receiving alimony (which is only slightly more than half of the number who claim to pay).
While lawmakers claim this will add nearly $7 billion in new tax revenue over ten years, many people are not happy with this idea, especially those who are exploring their options for divorce and are concerned they’re going to have to pay taxes on money they’re obligated to pay to their ex.
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If you don’t like how this sounds, you’re not alone. Many people who fear they’ll have to pay alimony don’t want to add this burden to their already high list of post-divorce expenses. However, there’s some good news—the new law doesn’t go into effect until January 1, 2019. Any divorce or separation agreement entered into before this date is still taxed under the old laws. This means if you’re considering getting a divorce, you can preserve this potentially-beneficial tax scenario until the end of 2018.
The team of New York divorce attorneys from Wisselman, Harounian & Associates can help you; contact us online now to start reviewing your options!