Divorce books/resources recommendations

JHS
Fri, 26 Jan 2018 17:19:42 +0000

You probably already know this, but it’s worth paying attention to it: The 2017 tax bill made a 180-degree change in the treatment of alimony for tax purposes, but effective for divorce agreements finalized in 2019 and thereafter (i.e., the change is not effective January 1, 2018, like most of the bill).

Under existing law, alimony payments are deductible by the payor and taxable to the payee. Since the payee was almost always in a lower tax bracket, that had the effect of putting a little government money on the table to subsidize alimony. That regime will continue to apply to divorce decrees finalized in 2018, no matter how long they go (probably unless they are substantially modified after 2018). If you don’t reach agreement in 2018, however, starting in 2019 alimony payments will be treated just like property division payments: no deduction to the payor, no income to the payee. There will probably be a revision in the formulas or calculators some states use to reflect those tax changes.