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Tax changes for alimony to begin soon

For many couples in Indiana who get divorced, one person may end up paying spousal support to the other one for some period of time. Despite many social changes in the United States, the person ordered to pay alimony is most frequently the husband as he is often the spouse who earns the higher income in the marriage. When ordered to pay alimony, a man has historically been able to deduct the payments from his federal income tax return. This has to some degree helped to make it easier for men to accept making these payments.

With the holiday season in full swing, it is important to be aware of some legal changes that will go into effect very soon when the calendar turns to 2019. One of these changes is positioned to dramatically shift the conversations that take place during divorce agreement settlements. As reported by Bloomberg, instead of deducting alimony payments from a tax return, the husband who must make these payments will also pay the income tax on them. For any women who must pay spousal support, the same thing will be true.

Even with the strongest wish to support one's family after a divorce, a person may understandably be less willing to agree to paying alimony starting in January than they are now given this change. A spouse who might face paying alimony, child support and the associated taxes may prefer to try and negotiate different terms.

The additional tax income that may be received by the government could actually reduce the overall pool of money that a couple has to split in their divorce.

 

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Robert Schembs
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