Posted on 11/07/2017 12:19:30 PM PST by Mariner
Since details of the new tax overhaul bill were released on Nov. 2, people of all income levels and ages have been trying to figure out how they could be affected going forward. One group of folks not likely to be happy: those paying alimony.
Section 1309 of the House bill would eliminate the deductibility of alimony. Killing the alimony deduction is one of the smaller revenue targets for the House Republican tax bill, yet it is exceedingly significant to the people affected.
Under current rules, alimony payors may deduct their payments from their taxable incomes, thus lowering their income taxes. In return, recipients pay income taxes on their alimony income. Because payors are usually in higher tax brackets and recipients in lower tax brackets, families can save money on taxes by shifting the tax burden to the lower earner. The saving can help increase cash flow for divorcing couples. They can then decide how to allocate the savings: to the payor or the recipient ... or the court can do it for them.
According to the House, abolishing the alimony deduction would not be a large revenue generator. Over 10 years it raises only about $8 billion. That is because the tax increase on payors is offset by a tax decrease for recipients. For them, alimony income would no longer be taxable.
This wrinkle could have a significant impact on divorce settlements. For many payors, saving taxes on alimony payments is the one pain relief that comes with making the payments. According to John Fiske, a prominent mediator and family law attorney, "Alimony is the greatest tax deduction ever." Without the deduction, payors will find it much more expensive and more difficult to agree to pay.
(Excerpt) Read more at yahoo.com ...
“This is a God-awful attack on divorced men!”
Not to worry.
There are a bunch of folks here who say this only applies to liberal Blue states. There’s no way it will apply to a man in Ohio.
Besides, it’s your own damn fault you’re in this situation anyway!/s
This tax bill is about raising taxes on individuals to pay for business tax cuts. I’m for business tax cuts, but pay for them by cutting spending. Otherwise KILL THE BILL
Yes, Texas does...
http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.8.htm
It’s looks a LOT like CA laws on the matter.
That officially got started on election day 2016. Trump-supporting patriots need to finish the job that they started with Trump in the 2018 elections.
My thoughts exactly.
It's not like child support. These are maintenance payments to an adult.
“These are maintenance payments to an adult.”
And they are ordered by a judge at the barrel of a gun.
Pay or go to jail.
Resist that arrest and they’ll likely shoot you.
The vast majority of single mothers I know created the situations; the men did not leave. Women tend to think of children as property to have.
“Will the woman be taxed on the money?”
They are taxed on it today.
Yep, that’s the current rule. My point was only that either way, the taxman gets a bite. Why should they care either way?
Stick with the current rule, as people have a history of reliance on it.
Mariner, you’re killing me!
“Mariner, you’re killing me!”
Not me.
You must be thinking of those Congressional Republicans.
BTW, what will a loss of $38,400 in deductions cost YOU?
From the article, it sounds like the payer of support will be liable for the income tax on the support money, but the recipient will no longer claim the support money as income.
My interpretation is that this effectively keeps the income element with the higher-earner, presumably taxing it at a higher rate.
I don’t think it is being taxed twice, through the current or proposed process.
There’s at least 3 of us on this thread alone that will pay several thousands of dollars more in taxes as a result.
Extrapolate that througout the country and that 10’s of thousands of men being screwed by the Congressional Republicans. Maybe 100’s of thousands.
After being screwed over by their ex.
Depends on what bracket it lands me in.
If you’re paying $3,200/mo in spousal support it will put you in the 25% or 35% bracket.
“I paid $28k in support in 2017”
I’ll trade my annual responsibility for that amount any day. And my alimony, based in FL, has no expiration date.
Gotta go back to court to ask permission to retire. How bad does that suck?
“””Yes, but then the males bang out a bunch of kids with a woman whom then then divorce and usually leave her alone to raise them. Guys, time to put your dicks down if you don’t want the responsibility for the children their “use” brings. If there are no offspring, then there should not be any long-term spousal support.””””
I can’t tell if you are really that ignorant or are that insipid.
I don’t think this bill will pass. I’m beginning to think it has been sabotaged by those who don’t want tax reform. It really is looking like a deliberate attempt to prevent passage.
I’d love to see business taxes cut, and it doesn’t look like this bill will hurt me much - but it has lots of politically stupid stuff added in. GOP-E working to keep a Democrat tax system?
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