New Tax Laws Apply to Divorces Finalized in 2019

Posted on December 27, 2019 11:28am
New Tax Laws Apply to Divorces Finalized in 2019

Nobody likes filing their taxes, and for couples whose divorce was finalized in 2019, it may become even more complicated with the new 2019 tax laws. A few recent changes may affect how you file your taxes as a divorced individual, and it can change what type of return you claim. While these new laws may prove beneficial for some, it’s always best to get ahead of the game by preparing for these new changes.

Before you’re blindsided by these new tax rules, make sure you know what the new tax laws are for 2019 and find out how they could affect your divorce. The new changes are as follows:

1. Paid alimony is no longer tax-deductible.

Prior to 2019, divorcees who paid alimony (also known as spousal support) were able to file their payments as a tax deduction. With the Tax Cuts and Jobs Act of 2018, that rule no longer holds true. Spousal support payers cannot claim any payments made after December 31, 2018 as deductions. The idea behind this new law is to tax the higher-earning individual, so alimony-paying divorcees should be prepared for this change.

2. Alimony received is not taxable income.

Divorcees who received alimony payments after December 31, 2018 will no longer have to claim their alimony as a taxable income. As mentioned above, the tax burden will fall to the paying spouse.

3. The tax deduction for children has changed.

Under the new tax law, parents no longer receive an exemption for each claimed dependent. Parents who claim dependents will now use a child tax credit to compensate for taxes owed. Only one parent at a time may claim a child as a dependent. Typically, the parent with whom the child lives with for most of the year (more than half) is the one who claims the child as a dependent.

Some other notes for divorcing spouses:

The following aren’t new laws for 2019, but tax rules that divorcing spouses should know:

  • If your divorce or legal separation is finalized at any time in 2019, both spouses must file tax returns as a single person or as head of household (if you claim at least one dependent), even if you were married for part or most of the year.
  • Child support payments are not deductible.

If you aren’t sure if these new laws will affect you, or if you’re concerned about how you should adjust your custody agreement or spousal support arrangement to accommodate these new laws, make sure you discuss your concerns with one of our experienced attorneys at McKinley Irvin.

Ready to discuss your divorce case with an attorney? Contact our team at McKinley Irvin.

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