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Illinois divorce attorney, Illinois family lawyer, Illinois child custody lawyer,With the new year fast approaching, 2019 is right around the corner. While this is exciting for some, couples who have just filed for divorce or are mid-divorce could see some not-so-nice changes with the new year. A law that was passed in December 2017 will come into effect beginning January 1, 2019, and will affect any couple who has not finalized their divorce by December 31, 2018. Act Will Change Tax Implications For Divorcing Couples The Tax Cuts and Jobs Act (TCJA) was passed in December of 2017 and made changes to the tax code that will affect about half of Americans in some way, shape or form when it goes into full effect at the beginning of the year. For divorcing couples, the TCJA will affect the tax implications of spousal support (also known as alimony). The act will change the existing 77-year-old law on who pays taxes on spousal support. Old Law vs. New Changes Any couple who finalizes their divorce before December 31, 2018, will adhere to the current rules on who pays taxes on spousal support. As of now, the person who is paying the spousal support can deduct the payments on their taxes. The person who receives the spousal support must pay taxes on the payments depending on their tax bracket. Under the new law, spouses who pay support payments will not be able to deduct the amount on their taxes and the spouse who receives the payments will not pay tax on them. Implications of the Change Couples who are currently going through a divorce have more pressure to finalize their divorces before this new law goes into effect. The American Academy of Matrimonial Lawyers estimates that divorces will change significantly in the way they are settled and that divorce cases will become more hostile than before. The organization has also stated that couples who currently have prenuptial agreements should reexamine the documents and update them based on the new law. Get in Touch with an Elmhurst, IL Spousal Support Attorney

It is no secret that a divorce can be a messy and complicated process. With the new law that will take full effect next year, your divorce could become even more complicated. At Weiss-Kunz & Oliver, LLC, you can have peace of mind knowing that we are here to help you throughout your divorce process and will help you make the best decisions about spousal support and its effect on your taxes. Our highly-skilled Lincolnwood, IL spousal support attorneys understand the importance of receiving support and that spousal support is something that you may depend on, especially right after your divorce. Contact our office today to schedule a consultation by calling 312-605-4041.

 

Sources:

https://www.efile.com/tax-deduction/income-deduction/divorced-tax/

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Illinois divorce attorney, Illinois family law attorney, Illinois divorce laws,Sweeping tax reform legislation was passed by the United States Congress in December 2017, with the Tax Cuts and Jobs Act representing the largest change to the federal tax code in the past three decades. The changes implemented in this bill will have an impact on people across the country in a wide variety of ways, and both individuals and organizations are still working to determine how they will be affected. One area of this bill that divorcing spouses should be aware of is a major change to how spousal support (alimony) will be taxed.

Taxes on Spousal Maintenance

When spouses divorce, one spouse may be required to pay maintenance to the other spouse, allowing them to maintain a lifestyle similar to what they enjoyed when they were married. This is usually the case when one spouse earns a higher income or when a spouse has chosen to devote their time and energy to the family rather than to further their career. Prior to the tax reform bill, the spouse paying maintenance would deduct the amount of these payments from their taxable income, and the spouse receiving maintenance would pay taxes on these payments.

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