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Alimony tax law changes now in effect

As the new year approached and then made its appearance, you may have wondered what changes the coming year would have in store for you. You likely hoped that any new aspects would prove beneficial, even if they seemed difficult to face at first. In particular, you may have had this hope for your pending divorce case.

You may have come to the decision to divorce well before the new year, but getting such cases underway can take a considerable amount of time. Now that 2019 is here, you will also need to contend with tax law changes that could affect any alimony awarded in your case.

Major change

The major change affecting alimony and its related taxes is that the paying spouse can no longer deduct spousal support payments from his or her income when it comes time to address income taxes. This deduction commonly allowed paying individuals to feel somewhat more comfortable with providing alimony to ex-spouses because they at least got a tax break. However, many individuals suspect that alimony will now become a point of greater contention during divorce due to the loss of this benefit.

If you earned less than your spouse or otherwise will need support to continue living your current lifestyle, you undoubtedly still want to receive your due alimony. However, if you earned more than your spouse and may have to make support payments, you undoubtedly do not look forward to the taxes involved.

Consider your options

Of course, if alimony does become a major sticking point in your divorce, you may want to remember that other options for financial exchange exist. For instance, if you do not want to hold the tax burden associated with paying alimony, you may want to instead offer your soon-to-be ex a portion of your retirement amount. While losing some of your retirement funds is not ideal, the receiving person would hold any related tax obligations for those funds.

You may even want to consider putting your divorce on hold, if possible. Because these changes are so new, it may take some time for financial and legal professionals to find the best routes for reaching agreeable outcomes. By holding off, you may have the ability to see the outcomes of other cases first and then determine what options may best suit your personal circumstances.

Of course, it still pays to have the right legal information even if you do not forge ahead with your divorce as quickly as possible, and you may want to utilize local Colorado legal resources for assistance.

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