Preparing for Divorce in 2019 – Examining the Upcoming Changes to Illinois’ Spousal Maintenance Laws

Wheaton alimony attorneysEven though alimony is not awarded as frequently in divorce as it once was, it is still an important (and often contentious) element in some divorce situations. It can ensure a disabled or disadvantaged spouse has at least some financial resources as they attempt to rebuild their life (perhaps by going back to school to start a new career or re-entering their former career field). Alimony can also ensure a family unit is financially stable in the months immediately following a divorce.

Thanks to the passage of the Tax Cuts and Jobs Act, alimony laws in the United States will undergo some monumental changes in 2019. A provision, which has been in place for more than 70 years now, will be completely eliminated, and it is expected to negatively affect many divorcing couples in the year to come. Learn how you can prepare for the upcoming alimony changes, and discover how our seasoned Wheaton family law attorneys can assist with mitigating against the potential issues in your Illinois divorce.

How the Tax Act is Changing Alimony in 2019

For more than 70 years, payers of alimony in the United States have been able to claim their payments as a taxable deduction on their annual tax returns. Spouses who received alimony were also required to report their alimony payments as taxable income. Both aspects of the alimony law will be changing, come 2019; payers no longer receive a taxable deduction, and receiving spouses no longer have to report their alimony as income.

Projected to raise $6.9 billion for the Internal Revenue Service (IRS) over the next decade, the alimony changes are expected to leave the entire family unit with less money. Paying spouses have relied on the tax deduction to offset their overall cost of paying alimony; without it, they remain in the same tax bracket, which could make them subject to higher taxation at the end of the year. As a result, they may be unable to pay as much in alimony, meaning the receiving spouse, though no longer required to claim alimony as taxable income, will likely receive a substantially smaller alimony payment each month to even out the annual discretionary spending amount available to each spouse.

If that sounds a bit confusing, rest assured that you are not alone. In fact, there are aspects of divorce and alimony that are essentially “in limbo.” For example, no one can say for certain how pre-existing alimony agreements will be handled, such as those found in prenuptial agreements that have not been updated to reflect the new laws.

Our Wheaton Divorce Attorneys Can Help You Plan for the Upcoming Changes to Alimony

While some couples may be able to complete an agreement before the end of 2018, most divorcing parties can now expect to be impacted by the upcoming alimony changes. Protect your family’s financial future and your best interests. Contact Stock, Carlson, Oldfield & McGrath, LLC for a personalized consultation. Our seasoned and skilled DuPage County divorce lawyers have more than 40 years of experience. Call our office at 630-665-2500 today.

Source:

https://www.cnbc.com/2018/11/29/new-divorce-tax-rules-could-result-in-a-big-financial-disadvantage.html

This entry was posted in Spousal Maintenance and tagged , , , , . Bookmark the permalink.
 
We accept the following major credit cards:
 
We Accept Visa, Mastercard, Discover and American Express