Tag Archives: TaxLaw

How Does the New Tax Law Affect Alimony?

Late December, President Donald Trump signed a major tax overhaul passed by Congress. There are many ways the recent changes to our tax code will affect you and millions of others. One of these changes will affect alimony payments for divorce agreements that are finalized after December 31, 2018. Presently, you may deduct alimony payments on your income tax return. Your ex-spouse must pay taxes on any alimony payments she or he receives. Alimony payments are treated as income for your ex-spouse. Starting on January 1, 2019, this policy will go into reverse. If you divorce by this date, then you would no longer be able to deduct alimony payments. Your ex-spouse would not have to pay taxes on alimony payments he or she receives. Alimony payments would become “tax neutral”, much like child support. This is a major change for most filers. Depending on your income tax bracket, the…
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