Law Office of Robert A. Skovgaard
Call For Your Free Consultation:
203-883-4506

Tax changes affect divorcing spouses

Some Connecticut spouses have been pushed to escalate their divorce timelines due to changes in tax law that are scheduled to go into effect with the new year in 2019. The Tax Cuts and Jobs Act, passed in December 2017, includes changes to the way that spousal support is treated when it comes to taxation. Divorce is always costly, especially for high-income families. When one spouse significantly outearns the other, spousal support is common at least for the period immediately following the separation. This is especially true in a long-term marriage or when one partner has been a stay-at-home parent.

For decades, spousal support has been tax deductible for the payer and taxable, like other income, for the recipient. For the divorced couple, this leads to an overall tax savings as taxes are paid at the lower-earning person's rate. The deduction can also be significant, depending on the amount paid each year. As a result of this tax system, payers have had an incentive to agree to generous spousal support provisions as part of divorce negotiations.

This will change for divorces finalized after Dec. 31, 2019. Because it will remain the same for those who have already completed their divorces, many are rushing to finalize before the turn of the year. For others, alimony will now be taxable by the payer and the recipient will take the income tax-free. While this appears favorable to recipients, it is likely to lead to an overall decrease in the amount of support paid.

A spouse who is thinking about divorce may want to look closely at how ending their marriage will affect their finances. A family law attorney can work to protect a client's assets, advise about the financial effects of a dissolution and seek a fair agreement on all matters, including property division and spousal support.

No Comments

Leave a comment
Comment Information
Email Us For A Response
How Can I Help You?Schedule your free consultation today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Law Office of Robert A. Skovgaard
1234 Summer Street
Stamford, CT 06905

Toll Free: 877-380-5663
Phone: 203-883-4506
Fax: 203-348-0196
Stamford Law Office Map