There has been a lot of attention recently on different provisions of The Tax Cuts and Jobs Act of 2017. Couples considering separation or divorce may want to pay attention to the provision regarding alimony. Currently, alimony is tax deductible for the paying spouse and is counted as taxable income to the spouse receiving alimony. Under the recently passed Tax Cuts and Jobs Act of 2017, couples who divorce (or enter separation agreements) after December 31, 2018 will be subject to the new rules where the ex-spouse paying alimony will not be allowed to take the tax deduction, and the ex-spouse receiving alimony does not count it as income.
The new rules will not affect divorces finalized before December 31, 2018.
These new rules have the potential to make negotiations more difficult, which makes mediation an even more attractive option for couples wishing to resolve a divorce amicably and with lower costs for both parties. Mediation can help couples identify creative, fair, and equitable solutions when dividing assets and debts.
If you are considering divorce or a prenuptial agreement and have questions or want to schedule a mediation, please contact us at 918-921-5310.
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