If you're thinking about getting a divorce, this news about the 2018 tax plan might interest you. The new tax plan may actually cause more people to divorce more quickly than expected.
According to the news from Feb. 4, the Tax Cuts and Jobs Act would eliminate alimony write-offs, which means that people who want to get them need to consider filing for divorce before that happens. The tax write-offs will be eliminated in 2019 as of the time of the article.
The deduction, which is decades old, has a purpose. It's meant to reduce the impact of alimony on a spouse. For instance, if you pay $100,000 of alimony to your ex, you'd get a substantial portion of that back as a deduction on your taxes. That, in turn, reduces what you owe to the government, which helps you with your expenses.
It's believed that the changes will be bad for women in particular, since their spouses may be less likely to want to pay as much as they did in the past. Additionally, the paying spouse may not be able to afford to pay as much as before. This is economically harmful and could make divorces much more aggressive and acrimonious than they were in the past.
Alimony has been a deductible expensive since World War II. If you want to make sure you can deduct what you have to pay, filing for a divorce and making those payments in 2018 may be the best solution. Your attorney can help you make a decision regarding your case, so you make a good financial decision based on facts and education.
Source: Politico, "Why Trump’s tax plan may spur more divorces," Brian Faler, Feb. 04, 2018