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Helping you navigate the new alimony tax rules

| Apr 19, 2019 | Divorce

If you have not reviewed your prenup or post-nuptial agreement yet to see if it fits with the new tax rules about spousal support, maybe it is time for a review. Alimony payments are no longer deductible from income tax, and that could be a significant issue for you in a divorce.

At Schembs Law, our goal is to guide our clients through the Indiana equitable divorce structure while preserving their rights and the requirements as much as possible. This requires us to keep abreast of changes in federal law as well as state regulations and precedents.

First, a word on self-executed divorces: One of the main issues you may face while making decisions in a time of change is the presence of misleading information. There are many resources that, while seemingly reliable, could still point you towards a decision based on the context of the previous tax regime.

With that in mind, we believe that a clear and equitable agreement is typically the best approach in Indiana divorce. This is the stated intention of property division law in Indiana, and complying with it could secure your agreement for many years to come. Basically, in order to avoid costly post-divorce modifications, we believe that it is practical to make agreements that are fair in the long run.

This general rule also applies to people who are dealing with their premarital contracts. In order to reduce potential conflict down the road, you may want to realign the details of these documents. That is especially true if you decided to include specific figures, as these may generate conflict now that the federal government taxes alimony differently.

We believe that a relatively small amount of preparation can safeguard against complicated disagreements in the future. After all, this is why many of our clients choose to sign prenuptial agreements in the first place. For more information, please continue to our main website.