Posted on 12/28/2017 8:14:12 AM PST by tired&retired
For any divorce or separation agreement executed after Dec. 31, 2018, the act provides that alimony and separate maintenance payments are not deductible by the payer spouse. It repealed the provisions that provided that those payments were includible in income by the payee spouse.
This will diminish the income benefits of increasing alimony and decreasing property settlement to take advantage of the differences in tax rates and deductions between the former spouses.
WOW. A lot of men had better think hard before they get married. And if they already are married, they had better fight hard if their wife tries to divorce them.
executed after Dec. 31, 2018?.................you men 2017?..................
The upside is that this will likely fire-up a long overdue effort to abolish alimony in state laws.
Amount of alimony will be adjusted to account for tax rates.
No, it’s December 31 2018! Changed to that date in the conference.
“The upside is that this will likely fire-up a long overdue effort to abolish alimony in state laws.”
It’s delusional to think alimony will ever be abolished.
The most anyone can hope for is the rate tables change.
But the impact on the man financially is utter and complete devastation. He may as well go to jail for not paying...at least there he will have food, shelter and medical care.
Total financial annihilation.
Best to do your homework before correcting others.
I've heard.
I was asking a question, not correcting anybody.................
But that means a whole nother year!..............
Looks like the payor spouse will need to calculate the cost of the support payment as
Alimony + Taxes = Total Cost of Alimony
Expectation should be that the amount of alimony negotiated going forward would be adjusted either by a larger property settlement w/ smaller alimony payment or a shorter period for alimony payments. Hire a lawyer who knows the time value of money - whichever side you are on.
Too bad for those payor-spouses who are locked in under the old rules and have a long way to go to satisfy their obligations.
Perhaps prenuptial agreements will become more common even among the less-well-to-do.
Good. Why should we subsidize someone else’s bad marriage?
“...those payor-spouses who are locked in under the old rules...”
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They (and folks entering alimony agreements prior to 12/31/2018) can continue to deduct their alimony payments and their alimony “receivers” will need to declare their alimony as taxable income.
You snooze, you lose.
Under the current rules, the payee spouse has to report as income.
The answer to your question of subsidizing then is whether under the current rules the total tax paid (by each spouse added together) less than the total tax paid if only the payor-spouse paid the taxes at payors rate? I don’t know the answer, but if there is a “subsidy”, it won’t be as large as one might think. For tax purists, a subsidy is a subsidy nonetheless.
Thanks for the clarification.
If I’m reading it correctly, the payee will no longer have to pay taxes on alimony. And why should they? It’s not income, and.that money has already been taxed once.
And if they already are married, they had better fight hard if their wife tries to divorce them.
I am not sure about others, but when my wife and I got married, we took vows to the effect “til death do us part”.
I remind her all the time that I am going to make sure that will be the case.
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