How Will New Tax Reform Affect Divorce in the Coming Year?
How Will New Tax Reform Affect Divorce in the Coming Year?
No one plans on getting divorced when they decide to tie the knot. Love will conquer all, right? Unfortunately, that’s not how things work and about half of all marriages still end in divorce. Divorce is almost never pleasant and any couple that decides to split must settle several issues, including alimony, or spousal support.
So what does that have to do with taxes?
Under the old tax law the person paying the alimony was able to deduct that money from his or her income. At the same time, the spouse receiving the money as alimony had to pay a 15 percent tax on those funds. Not anymore.
Under the new law it will be exactly the opposite. In other words, the spouse who has to pay alimony will no longer be able to deduct it from his or her income and the spouse who receives the payment will not have to pay taxes on it.
This will result in a net gain for the government, which it can then put towards helping to offset the price of its massive tax cut. On the plus side, the law will not go into affect until 2019. However, that could mean a lot more people will decide to divorce this year in order to save on taxes.
Not that more people are going to suddenly decide to divorce, but for anyone contemplating the possibility, this could be the factor that pushes them to go through with it. The new law could also lead to some messy situations and potentially bitter divorce proceedings as couples battle out when to end their marriages.
We hope you found this article about “How Will New Tax Reform Affect Divorce in the Coming Year?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe to our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
Which Tax Breaks Will Be Restored for 2014?
It seems like every year at this time the conversations start to creep up in the media regarding which tax breaks will be renewed and which breaks will get the permanent axe. This year is no different as Congress already let more than 50 such tax breaks expire at the end of 2013. Now the…
Helpful Deduction Tips for Collectors
Are you a collector? Have you ever wondered if you could donate the items you collect to a charity auction for tax break purposes? If you are considering this scenario, there are some things you should know. The first thing you need to make sure of is that the charity you are considering is actually…
Ask Yourself These Key Questions When Planning Your Estate
Almost no one can choose when he or she will die, but everyone can choose how his or her assets will be handled when that time comes. It’s really just a matter of having a current and effective estate plan in place before you go. Estate planning is a wide subject with many aspects; and…
Another Senator Says It’s Time to Go After the Wealthy
Another Senator Says It’s Time to Go After the Wealthy We all know that death and taxes are two certainties in life. However it seems that we should probably add the argument that the wealthy should pay more taxes to that list of certainties. According to reports, Senator Bernie Sanders of Vermont recently shared his…