When you split from your Texas spouse, you can anticipate that doing so will impact numerous aspects of your life, potentially affecting everything from where you live and whether you work to how often you see your own children. At Fabio & Merrill, we recognize that a new tax law that took effect at the beginning of the year may also have a notable impact on your divorce proceedings, provided at least one party involved the divorce plans to pursue alimony.
Per Forbes, one of the biggest and most notable tax law changes that went into effect at the beginning of the year involves alimony payments. If you plan to seek alimony from your former partner, or conversely, if you believe your ex plans to seek alimony from you, it is important that you understand how paying or receiving alimony will affect you, come tax time.
Until this year, anyone who divorced and then received alimony payments would add the money received to his or her taxable income. The party paying alimony, meanwhile, could list the amount paid as a tax deduction. This rule no longer applies, however, so there is arguably little benefit available to the person paying alimony. How might this affect your divorce case?
While it may not hold true in all cases, many people navigating their way through divorces nowadays may be more likely to fight hard against paying alimony, because they will no longer receive a tax benefit for doing so. In some instances, this may lead to longer, more contentious divorce cases as one party seeks alimony and the other fights hard not to pay it. You can find more about divorce issues on our webpage.