Tax Law Changes and Divorce in 2019
Beginning January 1 of this year, tax law changes went into effect which will impact how separating spouses negotiate agreements - most notably alimony provisions - in the new year.
The following article from PBS News Hour outlines how the new law will affect couples separating in 2019 and beyond, including some tips on navigating divorce and taxes for 2019.
While alimony has historically been tax deductible for the payor and taxable income for the payee, this is no longer the case under the new tax law. Supporting spouses are likely to be more restricted in how much alimony they can agree to pay, which will change the overall negotiation of agreements for separating spouses.
Among other changes, the new law also eliminates the tax exemption for each dependent child, which is another factor for families to consider.
While agreements made before January 1, 2019 will be governed under the old tax rules, it is important to note that the new law could affect future modifications of existing support agreements.
If you are separating from your spouse in 2019, or considering a modification to an existing agreement, it is important to talk with both an experienced family law attorney and a financial advisor or tax expert about how the new law will affect you.
Read the full article from PBS News Hour here: How the tax laws for divorce will turn upside down in 2019.
This article is intended for information purposes only and is not to be considered or substituted as legal advice. This article is based on North Carolina laws in effect at the time of posting.