If you or any of your clients have been considering divorce, the recently passed tax changes may provide another reason to file. The 76-year-old deduction for alimony payments will be wiped out next year by the Tax Cuts and Jobs Act. Losing that deduction has family lawyers telling their clients to act now. Politico takes a look at how:
Potential divorcees have all of 2018 to use the alimony deduction as a bargaining chip in their negotiations with estranged spouses. The deduction substantially reduces the cost of alimony payments — for people in the highest income-tax bracket, it means every dollar they pay to support a former spouse really costs them a little more than 60 cents.
Many family attorneys are criticizing the change, saying it has the potential to make divorce negotiations even more acrimonious. Eliminating the alimony deduction is forecast to generate $6.9 billion in federal revenue over the next 10 years. Read more about how the tax law will affect divorcees at Politico.