AAML: Tax Law Might Turn Divorce Into a Messier Ordeal
More couples will bring their dispute on alimony payments to a court trial once a new tax scheme takes effect by 2019, according to the American Academy of Matrimonial Lawyers.
AAML head Madeline Marzano-Lesnevich said that the existing tax treatment on alimony payments “helps settle cases”. However, the changes under the Tax Cuts and Jobs Act will compel paying spouses to provide a smaller amount to their former partners.
Men comprise the majority of paying spouses among divorced couples in the U.S., which means they typically earn more than their spouses. The current rule allows them to deduct alimony payments from their taxable income, while the receiving spouse would then have to cover the fees from alimony.
The new tax system for alimony will be the exact opposite. By eliminating the tax break, many divorce attorneys in Nassau County and other locations across the country believe that their future clients will have to deal with a more complicated separation. Some lawyers also anticipate that the new tax law will diminish the bargaining power of women, who most account for alimony recipients.
There are two scenarios that may happen next year. First, couples who are in a rough patch will likely pursue an expedited divorce process to avoid the tax changes. The second one involves a worse ordeal for some couples.
Ken Neumann, New York-based Center for Mediation and Training director, said that the tax changes will compel couples to stay married because they cannot afford a divorce. Divorce lawyers can answer your questions about how the new policy will affect your income, especially if you will be the paying spouse.
The first quarter of 2018 is halfway over, so it means you only have a shorter time left to decide whether to leave your spouse and avoid a stressful argument over alimony terms.