How Laws will Change in 2019
It’s no secret that the divorce process isn’t an easy one. Former spouses must divide their assets, decide who will get to stay in their home and in some cases, learn to share custody with their children as well. Aside from the difficult emotions that everyone in the family must deal with during the split, there is also plenty of paperwork, mediation, attorneys, the Florida court system and money involved as well. While this seems like enough trouble for a lifetime, there are new tax changes that will be taking effect in January 2019 that could complicate divorce proceedings further for millions of Americans. If you are thinking about a divorce or have already started the process, there are a few key law changes that you need to be aware of in 2019 and beyond.
4 Ways That New Tax Changes Will Effect Divorces in 2019
Any alimony paid out after a divorce will no longer be counted as a tax-deductible item and any alimony received will no longer be considered taxable income. This is a huge change that could make the divorce process extra difficult and heated for many former spouses. As a result of this big change, divorcing spouses with higher incomes will likely fight much more aggressively to pay less in alimony because the government will no longer offer a tax deduction for payments.
On the other hand, low-income spouses are much more likely to fight to get as much alimony as possible, since there will no longer be a tax burden to consider. Finally, any legal fees that are paid to an attorney who helps secure alimony will no longer count as a tax deduction.
Any couple who is already divorced and agreed upon alimony payments will be able to have their current agreement grandfathered in. However, if the agreement is modified in 2019 or beyond, their alimony payments could be subject to the new tax law changes. This means anyone considering modifications to their divorce agreements must be very careful as we move forward into 2019.
3. Pre and Post-Nuptial Agreements
The new tax rules may also affect both pre and post-nuptial agreements, so it is important to have these documents reviewed by a financial consultant and your attorney. It is possible that the new tax laws could nullify certain items in these types of agreements, causing issues as you move forward with your marriage or divorce proceedings. If possible, it is suggested that couples re-negotiate terms when possible to avoid major issues in the event of a future divorce.
In that past, divorcing couples could rely on an exemption for each dependent. However, 2017 changes to the tax laws eliminated the $4,050 exemption that was previously available for each dependent through to the year 2025. Additionally, the child tax credit was modified and actually doubled from $1,000 to $2,000. If divorce is in your future and you have children, it’s important to keep these changes in mind, as they will affect how you file your taxes each year.
Looking Ahead: Divorce in 2019 and Beyond
If you plan on getting a divorce in 2019, there are a couple of key factors to consider:
The new laws mean that each former spouse, their attorneys and financial advisers should be looking at your finances from all angels. While alimony is the biggest consideration to keep in mind, there are many assets that could be affected by these changes.
Don’t be over eager to finalize your divorce. If your divorce isn’t urgent, remember that attorneys and financial advisers will learn to navigate these changes over the next coming months and could be in a better position to help you as the year goes on.
Contact Yardley Law Today
In divorce, financial issues are often the cause of much stress and hard feelings. But with proper preparation and expert legal guidance, you can save yourself from huge surprises as you divorce in 2019 and beyond. Call (321) 633-0400 or contact our team today to learn more and schedule an initial consultation.