
Getting Divorced in 2019? Speak to a Tax Lawyer Before You Agree to an Alimony Order
If two spouses get divorced and have a substantial income discrepancy, they may be subject to an alimony order. Until 2019, the individual paying alimony would get a tax break, as they could deduct the payments from their taxes to lower their liability. The spouse receiving alimony would pay taxes on the funds, though that tax rate was generally much lower because of their lower tax bracket. The Tax Cuts and Jobs Act significantly changed how alimony payments are taxed, effective for divorce agreements after December 31, 2018. It is highly important to discuss the implications of an alimony order with a tax lawyer in San Francisco before you sign an agreement. Reversing Tax Benefits Under the new law, the person paying the alimony no longer gets to deduct alimony…