Alimony changes under 2017 tax reform legislation
Under the 2017 tax reform legislation, alimony will no longer be a deduction for the payor.
Attorney Tom Olsen: Thinking of divorce the new tax bill last year changed the alimony laws for the worse. I tell you what, if you are thinking about getting divorced and you are thinking that you may have to pay alimony, man, you want to get that divorce done and you want to get that alimony order in by the end of the calendar year 2018. Right now, if you're paying alimony, let's just say it's a man, okay? If you're paying alimony it is a tax deduction for you and it is taxable income to your wife.
After the new tax law goes into place beginning January next year, when you pay alimony, it is a no longer tax deduction to you and it is still taxable income to your wife. It's a double whammy, you're going to pay double taxes on that money. What that means is, is if you're paying alimony, it's no longer deduction to you that really hurts. It's just basically what it means it's going to be less money to go around for both the former husband and the former wife. More of your money's going to be going to the uncle Sam.
Chrissy: Exactly. Tom, once again, it depends upon-- It could be the husband it could be the wife. What you're saying is very important for people to take that into consideration. Again, alimony is awarded by the needs so it can be the who has the ability to pay and the lifestyle of the person. It can be the husband paying or it could be the wife paying.
Attorney Tom Olsen: It has something to do with how long you've been married as well.
Chrissy: There is definitely multiple factors.
Attorney Tom Olsen: Again, right now when you pay alimony, at least there is-- You may hate writing that check every month. At least, it is a tax deduction to you beginning any order this for alimony that comes after January 1 or 2019. It will no longer be a tax deduction to you and that's going to really hurt. That's going to be after taxes money. Again, what it means is, if you think you're going to get divorced and you think you may have to pay alimony, you want to get that done by the end of 2017. Man, there's going be a rush coming up for that. Hey folks my name is Tom Olsen, the name of the show is Olsen Law. Thanks for that story, great calls, and questions. We will see you next week. You're listening to News 96.5.