The end of the year is rapidly approaching and, for many people, that means getting ready to celebrate the winter holidays. However, there are some people who, even at this time of year, are in the midst of a divorce. As a recent article noted, those individuals may feel even more stress than they would have, due to the fact that, come January 1, there will be changes to the tax laws that will impact divorce decrees that are signed after the end of this year.
As the article detailed, once 2019 rolls around any divorce decrees that include alimony payments will be different from divorce decrees that are executed and ordered before the end of this year. Why? Well, quite plainly, an ex-spouse who, next year going forward, is ordered to pay alimony payments will not be able to deduct those payments from his or her tax obligations. And, the ex-spouse who receives payments will not need to count alimony payments among taxable income. These are huge changes to tax laws that have been in existence for decades.
The result? As December wears on, any couple who is currently in the middle of divorce proceedings may be in a rush to get a divorce decree finalized before the end of the day December 31. All while many courts, judges and court staff may be about to take time off for holiday vacations.
Each divorce involves its own unique facts. Some, in fact, may not involve alimony issues at all. However, those that do will likely have the soon-to-be ex-spouses involved thinking about the potential impact of tax law changes that will be coming up in the New Year.