When Congress enacted their Tax Cuts and Jobs Act last year, they also changed the way divorced couples were able to file their taxes. As of January 1, 2019, a new federal law went into effect that effectively removed the tax deduction option for alimony payers. Moving forward, alimony payers will not be allowed to claim their alimony as a tax deduction. In addition, alimony recipients won’t have to claim the income as taxable either. Before this year, alimony was taxable to the recipient and deductible for the payer. It is important to note, however, that this new law only affects divorce cases moving forward and not orders that are already in place.
There is another unique aspect to this new law. For Florida divorces made after January 1, 2019, alimony payers are allowed to transfer funds directly from their retirement accounts to pay their alimony. This means that they are effectively able to use tax-free money to pay their spousal support payments. When the other spouse accepts money from that IRA, then they are required to pay taxes on it. However, a transfer from an IRA would be a one-time transaction and would have to be formally laid out in a divorce agreement.
Alimony is also known as spousal support. The goal of alimony is to help divorcing couples make ends meet and effectively level the playing field. When one spouse has more resources or skills to support themselves moving forward, the courts require that spouse to pay a portion of their earnings to the other spouse. The amount of alimony and the length of time the couple was married plays a big role in determining alimony.
In the past, it was mostly husbands who were required to pay alimony to their wives. However, in recent years, this trend has changed drastically. Now, 20% of all alimony cases involve women paying alimony to their spouses. In fact, a recent survey found that 45% of lawyer recognized an increase in women paying spousal support in just the last three years. This is because more women than ever now occupy higher-paying positions.
There are numerous factors that help to determine alimony. Some of those factors include:
Determining alimony is a difficult and not always straightforward process. As such, it is important to speak to an experienced and skilled divorce attorney as soon as you are able. Your attorney will be able to answer your questions and help you through the divorce process as efficiently and painlessly as possible, while still protecting your future.
If you have concerns regarding alimony, divorce, legal separation, or any family related dispute, the Coral Gables alimony lawyers at Estevez-Pazos Law Firm, P.A. are here to answer all of your questions. No matter what life throws your way, it is important to understand all of your legal options. We can help you protect your parental rights, your assets and your future during every stage of life. Call us immediately for your consultation at (305) 717-7130 or fill out our confidential contact form and someone will call you back.