While anyone can go through a complex divorce, many agree that nothing complicates the divorce process much like money does. Because of that, many couples in Florida going through a high asset divorce are faced with many difficult and overwhelming decisions when it comes to their finances during and after dissolution. For some spouses in a wealthy divorce, an award of alimony might be part of the divorce decree. While this is requested and rewarded because he or she needs financial support post-divorce, the payee spouse is at least able to enjoy tax breaks for these payments.
These tax deductions might come to an end though. Unfortunately, those paying alimony in Florida and other states across the nation may no longer enjoy a tax break for paying alimony. According to reports, the proposed Tax Cuts and Jobs Act would scrap the tax breaks divorced spouses would get for paying alimony as a means to pay for the sweeping tax cuts planned by the current administration.
This isn’t a done deal though and this may not even pass. As of now, almost every dollar paid toward an alimony award reduces the payer’s taxable income by the exact same amount. It is anticipated that those currently facing spousal support obligations will not support these changes. Additionally, if they are passed, this could cause strain on the obligations of supporting an ex. In turn, this could lead to additional legal disputes or even missed alimony payments.
While these changes like wouldn’t dissuade the public from divorcing, it is likely going to generate more and longer legal disputes surrounding spousal support. This could mean more negotiations or even the unwillingness to agree to an alimony settlement. No matter where you are in the process, if you are dealing with divorce issues surrounding alimony or any other high asset divorce issue, it is important to understand your rights and options. This will not only help you reach an amicable agreement, it could help you address post-divorce issues as well.