“In this world nothing is certain, except death and taxes.” So goes the familiar saying often attributed to Benjamin Franklin. Now that 2018 is officially over, many of us have (hopefully) started thinking about our taxes. Isn’t that fun? With that in mind, we want to remind you of the tax changes that arrived with the new year and their potential to impact divorce, specifically spousal support.
Late in 2017, Congress passed a massive new tax plan. While we knew it was coming, it didn’t take effect until January 1, 2019. These changes affect many areas and most people will feel them in one way or another come tax time. Most important to family law, however, they alter how the government taxes spousal support payments.
It’s key to note that if you had a divorce settlement in place in place prior to January 1, 2019, and that decree includes spousal support, everything should remain the same. Only new settlements are affected moving forward. That said, should you, in the future, modify your spousal support arrangement, any subsequent settlement will be subject to the new laws.
In short, the new tax plan alters who pays taxes on spousal support payments. For a more in-depth examination of the changes and how they may impact divorce negotiations going forward, check this earlier article from our blog: The New Tax Plan, Divorce, and Spousal Support