LITTLE ROCK, Ark. – For Americans considering divorce, attorneys recommend acting quickly before new tax laws take effect in 2019.
Under new tax laws, taking effect in January 2019, alimony will no longer be tax deductible for the payer and the recipient won’t have to include it in their taxable income.
Experts say it could impact alimony payments by as much as 30 percent.
According to the IRS, the number of people reporting deductions for alimony payments significantly outweighs the number of people taxes on receiving alimony.
“What they decided to do is just wipe the slate clean and no benefit, no tax deduction essentially, no tax deduction, no tax being paid and effectively what they anticipate that’s going to do is generate about 6.9 billion dollars,” says family attorney Lauren Taylor.
Attorneys recommend finalizing an agreement with the court by October 1 in order to get it processed before the new tax law goes into effect on January 1.