Changes are inevitable. This includes tax changes. When a tax change occurs someone will be affected, but the question is, is that someone you? Based on the 2018 Tax Cuts and Jobs Act (TCJA), those who make alimony payments may find themselves affected by this tax code change. But how does it affect those individuals? If you or a loved one is seeking information in this area, contact an experienced North Carolina divorce attorney to understand the tax implications this law as it pertains to alimony.
Impact of 2018 Tax Code Changes
As of December 2017, a tax law – as it pertains to alimony had been around for 75 years. The previous tax law allowed anyone who paid alimony to make a tax deduction on their alimony payments, which allowed two things: it made alimony more affordable and also helped payors save on taxes in their personal income. However, the new law implicates that alimony agreements will no longer allow for those deductions, and that those alimony payments cannot be reported if done after the effective date December 31, 2018.
It is important to note, that for those of you who already receive alimony payments, thankfully, the new law doesn’t apply to you. However, if you decide to divorce and the divorce is finalized after December 31, 2018 then the new law will be effective as to you. Unfortunately, though you may think this new law only affects those paying alimony, it also may affect those receiving alimony as well as you may not receive as much alimony as you previously would have. Because of this, it is important to speak with an attorney to understand the implications of this new law and to strategize about the best possible outcomes for your case.
Need Legal Advice?
As if divorce negotiations weren’t difficult enough, North Carolina’s Tax Cuts and Jobs Act has made these negotiations a lot harder as it pertains to spousal support and alimony payments. Though no one truly knows the impact that this law will have, what we do know is that these divorce payers may offer less than they normally would in alimony negotiations. Because of this, you need an experienced North Carolina divorce attorney at The Law Office of Dustin S. McCrary to help you better understand the tax implications as it pertains to your case. Contact our office today for a consultation.