Divorce is not something most people want to go through, but yet, many people do. Their marriages may break down, or they may think they have no other option because of problems with finances or other factors.
While most people seeking a separation take their time preparing for divorce, going through property division and other arrangements carefully, many are rushing this year. Why? The 75-year-old deduction for alimony payments is coming to an end.
With the government’s $1.5-trillion tax ending the deduction on alimony, it’s not a surprise that people are attempting to resolve their divorces before that happens. It could affect everything from alimony to property division, so many wish to finalize their divorces before they have to adjust to a whole new set of rules.
With the new rules in place and no deduction, many who are ordered to pay alimony will seek lower payments with no tax relief to offset the difference. That means that dependent spouses could have a harder time obtaining the money they need to live comfortably and independently in the future. They may seek a greater number of property items or assets to offset what they’re unable to obtain in alimony, which could mean that couples spend more time arguing over their assets.
Before these changes kick in during 2019, it’s a good idea to work toward a resolution for your divorce. Getting tax deductions, and getting alimony in a fair amount, is better for both parties involved in a divorce, especially if they wish to fairly split assets without alimony interfering.