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.

Is Domestic Violence a Felony?

Yes, domestic violence can be a felony. A criminal case begins when someone reports an incident of domestic violence to law enforcement. If an arrest happens, criminal charges may be filed by the District Attorney. What is considered domestic violence? California...

How is Spousal Support Calculated?

In California, there are two types of spousal support: temporary and permanent (or long-term support).  Temporary support is support that is ordered before your final judgment of dissolution. Permanent or long-term support is ordered either at trial or through...

How Long Does It Take to Get a Divorce in CA?

If you plan to file for a divorce in the state of California, you're probably wondering how long the divorce process will take to complete. The answer to that question is—it depends. Under California family law, a couple cannot be divorced until at least six months...

JWB Family Law Adds Anne B. Howard ESQ., as a Senior Associate Attorney

JWB Family Law is expanding its team to welcome Anne B. Howard, ESQ, as a Senior Associate Attorney. Anne brings extensive expertise in family law to the team, specializing in child support, paternity, asset, and property division, and divorce. “I was drawn to the...

Custody and Successful Co-Parenting During the Pandemic

The COVID-19 pandemic has wreaked havoc in our daily lives. Schools are closed, parents are working from home, and some have lost their jobs. Life is not what it was just a few months ago. Children are now with parents all day—every day. Parents are now responsible...

How to Deal With Domestic Violence During COVID-19

There is a growing concern amongst professionals regarding a rise in domestic abuse during the COVID-19 pandemic. In the period from March 1 through April 25, 2020, the San Diego County Sheriff’s Department logged 2,309 domestic-related calls. This is roughly a three...

JWB Family Law Continues to Serve Clients During COVID-19

Heightened anxiety and uncertainty in the world often result in significant family distress, including a surge in domestic violence incidents. As a family law practice, we need to show up for our clients now more than ever. For that reason, JWB Family Law is operating...

How Do I Change My Family Court Order and When Should I Do It?

When should you change your Family Court order?  When it no longer serves the needs of your family.   For example, if a custody order is entered when your baby girl is two years old, it may say she stays with each parent for 2 or 3 days and then trades back.  This is...

What is Family Court Services Mediation and Do I Have to Attend It?

If you are unhappy with your current custody plan, or need to create a new one, you may ask the court for assistance.  To do that, you will need to file a Request for Order with the local court. Immediately upon filing the Request, you will receive a date to attend...

How to Legally Obtain a Paternity Test

It happens.  Sometimes we do not know who the biological father of a child is.  It is important information. Paternity effects health issues, as well as the socioeconomic ones.   Enter the paternity test.  It is not like the old days of enormous expense, blood tests,...