Our previous two blogs have focused on the new tax law and its impact alimony payments. The law takes effect January 1, 2019, and means the spouse paying alimony won’t be able to take a deduction, while the spouse receiving alimony will no longer have to report it as income.
The upcoming change has people wondering if they should have their divorce judgments finalized before the end of 2018, or if it’s more financially beneficial to wait.
In the last blog we discussed the three types of spousal support. To wrap up the series in this blog, we will explain how a change in income may affect modifications in spousal support.
The amount of spousal support may change when the financial circumstances of either party changes. If the income of either person, or the need for support changes, then you may seek a modification. If you have a substantial change in your income — such as losing your job — it’s imperative to reach out to an attorney right away and provide proof of this change so you can be granted a support modification.
However, any modification made after December 31, 2018 to a pre-existing court order will likely be subject to the new laws. Depending on if you are paying alimony or receiving it, you may or may not want to have your divorce judgment finalized in 2018. If you want to maintain the tax deduction, you need to jump on things now.
Wherever you stand, we encourage you to speak with our team at Landerholm Law. We are tracking the potential effects of the new tax law and will work with you to find the best solution. Landerholm Law will be by your side throughout the entire process.