Tax law changes create push for divorces by the end of the year
There’s a push to get a court date sooner rather than later for couples wanting to divorce.
But why is ending a marriage before the new year such a big deal.
It all comes down to money. And if your divorce is finalized before the new year you get to keep more in your pocket.
We’re talking about alimony.
Under the current law, payments made to an ex are tax deductible, meaning the payout is pre-tax.
But when the new tax laws begin January first alimony will be paid out after taxes.
Experts say this new rule will affect the bottom line for both couples.
Joanne Holt is certified in financial forensics, and shesays, “For the payor, the burden is it’s going to cost them more to be able to pay the payee. For the payee, it’s non-taxable income, but their gonna end up getting less money because the payor has less money to give them.”
Anyone who finalizes their divorce before January 2019 will be grandfathered in and will still have their payments taken out pre-tax.