Divorce is often a matter of careful negotiation. A Florida couple may find that coming to agreements quickly on matters like child custody and property division may allow them to move forward with their new lives. For some spouses, especially those with low incomes or who spent their marriages out of the workforce to care for children, alimony is an especially important part of divorce negotiations. However, new tax proposals currently under consideration in the U.S. Congress may complicate negotiations for many couples.
While paying alimony is rarely something a spouse wants to do, it is often a necessary part of a divorce settlement. Some spouses, though, agree to a substantial alimony sum because they can then deduct it when they file their taxes. In fact, that was the purpose of establishing that tax break — to provide incentive for high-earning spouses to be generous to spouses with lower incomes.
However, the new tax proposal seeks to abolish the deduction for alimony payors. This, in turn, may have a negative impact on many low-earning spouses. If this proposal is enacted into law, high-earning spouses will have no incentive to offer more generous alimony payments and may, in fact, have leverage to demand lower payments.
Divorce issues that are not mutually beneficial may be difficult to resolve. However, a divorcing spouse certainly wants to ensure his or her rights are protected and the future is secure. A Florida attorney can provide pertinent advice and advocate for the client’s interests during property division and alimony discussions.
Source: barrons.com, “Tax Proposal to Hit Divorcing Couples“, Nov. 3, 2017