Going through a divorce can often be a lengthy process for couples in Maryland and others around the country. They must address a multitude of issues as they work toward separating the various aspects of their lives. Though a divorce is not something that should be rushed, many experts have suggested that those contemplating a divorce should consider finalizing it in 2018. The impetus behind this suggestion concerns the new way alimony will be treated for tax purposes, beginning next year.
New changes to tax deductions with the Tax Cuts and Job Act are set to begin on Jan. 1, 2019. All divorce agreements executed by Dec. 31, 2018 will reap the benefits of tax deductions on alimony, but those agreements settled after Jan. 1, 2019 will lose out. Recipients of alimony in Maryland and other states will begin to receive payments tax-free.
On December 31, 2018, The Tax Cuts and Jobs Act goes into effect, eliminating the coveted tax deduction for alimony. Divorces completed before the end of the year will be grandfathered into the old law, where the payer will receive the tax deduction and the payee will be taxed. Residents of Maryland and other states could use Individual Retirement Accounts as bargaining chips in lieu of alimony payments.
Facing a divorce can be intimidating, especially if one's financial future is uncertain after separation. Many Maryland couples seeking a divorce will consider the option of having the higher-earning spouse pay alimony to the spouse who may not have worked or did not make as much money. After a relationship dissolves, alimony can bring a sense of stability for the recipient. However, one woman in another state decided to take matters into her own hands, opting for murder-for-hire instead of working through a financial agreement.
Divorce can be complicated, especially if a couple cannot come to an agreement in regard to alimony payments. To further complicate matters, a tax change is on the horizon that will potentially cause drawn-out divorces and contentious disputes. Maryland couples considering a divorce may want to contact an attorney to finalize matters in 2018 to avoid being locked into the new alimony tax law.
The recently enacted Tax Cuts and Jobs Act is likely to affect most Maryland residents and others around the country. The law changes how child credits, standard deductions and many other items are considered when doing one's taxes. One significant change regarding alimony will have a major impact on those going through a divorce after the end of 2018.
When going through a divorce, the court considers many aspects such as child custody and support, property division, and the stipulations of any prenuptial agreements that may exist. In some cases, a spouse may be required to provide spousal support to the spouse who earns less after the divorce in order to eliminate any unfair economic limitations. Before requesting alimony, it is important for Maryland residents to understand how these payments are calculated.
Maryland couples who have previously battled through a divorce know that the process is stressful, complicated and time-consuming. For spouses who earn less than their partner, alimony may be granted to address any unfair economic circumstances after a divorce. Appealing for alimony, or spousal support, is sometimes necessary but can also add more stress to an already uncomfortable situation. Unfortunately, Maryland couples in the midst of divorce proceedings may face some confusion with regard to the impact of the new tax laws on alimony.
Many Maryland residents likely know someone who has gone through an ugly divorce. Whatever the reason for the failed marriage, decisions of alimony, property division and child custody can be difficult to determine. One couple who became famous because of a house flipping show has recently battled in court about their alimony agreement almost five years after their divorce has finalized.
When a Maryland couple goes through a divorce, spousal support is often a component of that process. Determining the amount of alimony that one spouse will pay the other is a complicated task, and involves a careful evaluation of the family's financial status. Once the alimony payment has been determined, it can be an uphill battle to change the amount of those payments.