Answering Your Questions About the New Tax Law and Spousal Support

Taxes

If you’ve been keeping up with the news about the tax bill recently passed by both houses of Congress and signed into law, you may have questions about how the new law will impact your taxes. For those who either pay spousal support or those who receive spousal support, additional questions arise.

Let’s take a look at the answers to some common questions.

How Will the Tax Law Affect My Spousal Support Order?

The newly enacted tax bill signed into law by President Trump eliminates one very important part of California divorce law that existed for more than 75 years: the ability to deduct spousal support payments from the income of the paying ex-spouse and the requirement that the payee claim this support as income.  

After Jan. 1, 2019, all clients in divorce cases that include spousal support will need to be advised that the payor cannot deduct these payments and the payee does not need to claim them as income, just as with payments of child support.  

Thus, the payor’s tax burden will increase and the payee’s burden will decrease, leading to the possibility of protracted litigation over the issue, particularly as the court must consider the immediate and specific tax consequences to the parties under Family Code section 4320, subsection (j) when establishing long-term spousal support.

Looking at the tax bill as written, it is clear that Congress intended to and did eliminate many tax deductions—and the provision to repeal “alimony” deductions is part of that package. For more information, refer to the Tax Bill H.R. 1, subtitle D, section 1309.

The Bottom Line Related to the Tax Law and Spousal Support

Keep in mind that these changes do not affect California divorce cases that are completed and go to judgment during 2018, which should give clients and attorneys plenty of incentive to settle or conclude cases during the upcoming year.

If you are a payee, however, there may not be a lot of reason to finish a case during 2018, given the fact you will be receiving extra non-taxable income if your spousal support order goes into effect on Jan. 1, 2019 or later.  

Contact a San Diego Divorce Lawyer About Spousal Support

Alimony can be a complicated issue, but it is an important issue to understand for both parties. An experienced divorce attorney can help you understand how spousal support can affect you in a San Diego divorce and can even help you understand some of the potential tax consequences that may accompany alimony.

If you are considering divorce or have already made the difficult decision to pursue divorce and have questions, contact JWB Family Law to schedule a free consultation where you can find out more information about the San Diego County divorce process and how spousal support might affect you.

The Importance of the CFLS Designation

A Certified Family Law Specialist, or CFLS, is an attorney who has obtained certification in the standards of California family law and demonstrated optimal legal competence. Attorneys who obtain this certification have specific expertise in all aspects of family law, which includes divorce or the dissolution of marriagechild and spousal support, child custody, and temporary restraining orders, among other areas of emphasis.

Not every attorney practicing family law has obtained this certification. In fact, the designation remains relatively rare—there are fewer than 2,000 CFLS attorneys in California and fewer than 200 in San Diego.

Military spouse benefits after a divorce

It is important to discuss all these topics with the military spouse divorce attorneys you retain to help guide you through the dissolution of your marriage. Military family law can be complex when it comes to divorce.

What not to post on social media during your divorce

Anything you post on social media during a divorce can, and likely will, be used against you in your dissolution proceedings. It is extremely important to avoid posting about getting divorced on all your social media profiles because anything that can be construed...

Helping a friend through divorce isn’t easy

A person going through a divorce is often dealing with the loss of time with their kids, a portion of their retirement, their house, and even relationships with their in-laws.

Child custody during the divorce process

There are two types of custody: legal and physical.

What is the difference between filing for an annulment and a divorce

Invalid Marriage: Annulment Filing for an annulment through the Courts means asking the Court to order the marriage null and void, as though the marriage never occurred.  Annulments are granted when a Court finds a marriage is invalid.  In an annulment proceeding, the...

Getting divorced after 50 has its own challenges

Finances tend to be more complicated as second divorces generally happen later in life when folks have accumulated more assets.

Is January “divorce month”?

Many couples choose to wait until after the holidays to initiate divorce. They do not want their families to associate the generally happy, festive season with a sad event. Not to mention that Thanksgiving, Christmas, and New Year’s Eve all occur within a hectic...

Who gets the ring?

Finances tend to be more complicated as second divorces generally happen later in life when folks have accumulated more assets.

Surviving a second divorce

Finances tend to be more complicated as second divorces generally happen later in life when folks have accumulated more assets.