For those in Florida who are planning to end their marriage in the coming months, timing could play a big role in how the financial side of things works out. The Tax Cuts and Jobs Act will eliminate the alimony tax deduction, starting with divorces made final after the last day of 2018. That may seem like a long time away, but in reality, time is running out to reserve the right to claim that tax benefit.
Most divorce cases take a while to wrap up, even when both spouses agree on the majority of terms. When there is contention or disagreement on certain issues, the timeline can become far longer. That means that time is short in regard to completing a divorce by the end of the year.
The change in tax laws will eliminate the ability of a paying spouse to claim alimony as a tax deduction on his or her return. It also eliminated the obligation of a recipient spouse to claim those payments as income. That can change the negotiation landscape for many couples, which is something that should be considered when filing.
For those in Florida who are certain that divorce is in their future, it may be time to take the plunge and get that process started. Having the ability to claim alimony as a tax deduction can make a big difference in one’s bottom line come tax time. To learn more about how this change could alter tax obligations, take time to sit down with a divorce attorney to discuss the specifics.