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Tax law changes will have an impact on finances in divorce

The recent changes to the nation's tax laws will reportedly be the most significant in the past 30 years. The changes have spurred lawmakers to identify ways to generate money to pay for the tax cuts included in the bill. One of the ways tapped by Congress to increase revenue involves alimony. These changes and their tax implications are expected to have an impact on the number of divorce filings in California and around the country.

The new law designates that the spouse paying alimony to the other will no longer have a tax deduction. However, the spouse receiving the payment will not have a tax liability for it. This will essentially be the opposite scenario from the way the system currently works. When the news of the revision was announced, many couples believed the change would occur by the end of 2017. The changes will actually go into effect in 2019, potentially creating an increase in divorce throughout 2018.

Unfortunately, since the changes seem to favor one spouse over the other where taxes are concerned, there will likely be disputes about the timing of a divorce. Experts agree that since one spouse will possibly be faced with a great financial burden, discussions may be more contentious. Where timing is concerned, the tensions will likely be high. One spouse may be making an effort to finalize the divorce in 2018 if the existing tax law is more beneficial, while the other may be delaying action.

Going through a divorce can be a complicated process, particularly where finances are concerned. To ensure that one's financial position is protected, both currently and in the future, it would be advantageous to seek the advice of a California divorce lawyer. A knowledgeable attorney will work with clients to achieve the best possible outcome in the divorce proceedings.

Source: finance.yahoo.com, "Trump's tax bill will make 2018 a wild year for divorces", Ethan Wolff-Mann, Jan. 10, 2018

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