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Time is running out to finalize divorces before 2019 tax changes

As Texas readers may know, President Trump passed tax laws in 2017 that will affect divorce and taxes in 2019. This may seem like a far-fetched possibility for you, but if you may have to pay alimony or you think you will receive this type of spousal support, it could actually apply to your situation. In fact, there may be a reason to try and finalize your divorce before the end of the year.

If your divorce process is already underway, it might be beneficial to reach a satisfactory resolution as quickly as possible. The new changes in tax law will not apply to divorces finalized before January 1 in the New Year. If you are not sure how this could affect you, it is smart to take immediate action to find out how you can best protect your interests. 

What do the tax law changes mean?

Tax laws are notoriously complex, and in divorce, it is smart to consider the tax implications of any decision related to property division, alimony, division of retirement accounts and finances. Alimony, sometimes called spousal support, is payments made to the lesser earning spouse to offset economic inequity brought about by divorce. In 2019, couples will also have to consider the following as they navigate divorce: 

  • In 2019, alimony will no longer be tax deductible for the person making the payments.
  • These new tax laws could impact prenuptial agreements, which often address how spousal support will work in the event of a divorce.
  • Approximately 600,000 people benefit from the current deductions allowed for spousal support payments.

If you are navigating divorce, it is in your interests to negotiate and pursue an order that gives you the best chance of a strong future, not just what feels good now. If possible, you may seek to finalize everything quickly so that you can save time, money and additional legal complications after the New Year. 

When it's your future on the line, experience matters

The terms of your divorce order matter, both now and well into the future. You will benefit from intentionally pursuing terms that are fair and sustainable, particularly those that relate to alimony. If you are trying to settle these matters while the current tax laws are still in effect, you will find it beneficial to work with certain professionals, including an experienced family law attorney.

When it is your future at stake, the experience of your attorney is crucial. It is prudent to work with a lawyer who understands how to protect your rights both before and after the new tax laws are applicable.

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329 South Guadalupe Street
San Marcos, TX 78666

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