Couples who are ready to call it quits were racing to get divorced before the end of 2017. Partners pushed through their separations to steer clear of the tax overhaul bill that will take away millions of dollars from separating spouses. Much to the relief of thousands of couples who were unable to finish the process before January, the tax bill will not affect divorces until the end of 2018. Although this buys people more time, experts believe 2018 may see an increase in divorce proceedings.
Under current federal regulations, alimony payments are tax deductible for the paying spouse, and the receiving spouse must pay taxes on the compensation they receive. This process allows the payer to receive substantial tax breaks despite paying alimony, and the payee gets to collect more money since the IRS taxes the payment using the recipient's tax bracket rather than payer’s tax bracket. However, in 2019, alimony will become tax neutral.
Once the process becomes tax neutral, it will affect alimony payments in a variety of ways:
In short, both the payee and the payer will lose money when the new alimony bill is in effect.
A contested divorce takes at least 14 months to finalize, but that is considered fast for a contested divorce. In most cases, contested divorces typically take 18 to 24 months to complete—well past the 2019 deadline. Therefore, your only option to beat the clock is to file for an uncontested divorce.
Uncontested divorces are only possible when the couple agrees on issues such as the following:
Additionally, for an uncontested divorce to work, a spouse will need a practiced divorce attorney. Fortunately, Miller Law Group can help. Our law firm utilizes effective communication and situational transparency to walk spouses through their divorce processes. We are always upfront with you concerning your options and how your divorce process is moving along. If you are attempting to finish the process before 2019, we will do everything we can to move through your proceedings as quickly as possible. We understand your desire to get this done, and our firm can help.
To get world-class legal representation, call (508) 502-7002 now!