Westover Law Group
Put A Fearless Legal Advocate On Your Side
Call Us For A Free Consultation:951-290-3268

Experts say the new tax act could make divorce more expensive

For Californians who divorce after the end of 2018, alimony payments will not be tax-deductible or tax-payable. This is one of several tax changes brought about by the Tax Cuts and Jobs Act, which was passed in late 2017, that could affect the finances of divorcees.

Until the end of 2018, divorce agreements will operate under the old rules in which alimony was tax-deductible for payers. This will change starting in 2019, and it will not sunset in 2025 unlike other many other elements of the tax bill. As a result of the tax change, experts believe that most recipients will get less alimony.

There are also changes in how exemptions can be taken for children. Instead of parents using IRS form 8332 to take turns claiming the children on exemptions, there will be a significant Head of Household exemption. This will apply to single parents who have the children in the home more than half the time and pay more than half the expenses of the household. Parents may want to include a provision in the divorce agreement that makes the child tax credit, which can be claimed by the HOH, tradable if IRS regulations allow this. The divorce agreement may need to be written in a way that is flexible enough to accommodate other tax changes as well.

People who are getting a divorce should also take other economic considerations into account. For example, since California is a community property state, most debts and assets acquired since marriage by either party are considered marital property. However, couples can negotiate many different types of arrangements that do not necessarily result in a 50/50 split. In some cases, assets will be costly or difficult to split. Therefore, a divorce lawyer may recommend that each person keep certain assets.

No Comments

Leave a comment
Comment Information
  • Avvo Rating 10.0 superb | Top Attorney Family Law
  • Avvo Clients' Choice 2013|  Family Law
  • OCBA | Orange Country Bar Associations
  • United States Court Of Appeals | Ninth Circuit
  • State Bar Of California
  • Federal Bar Association
  • AV Preeminent For Ethical Standards and Legal Ability 2014
  • AV Preeminent For Ethical Standards and Legal Ability 2018
  • State Bar Of California | California Board Of Legal Specialization
Email Us For A Response

Start Building Your Path To A Brighter Future

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

24640 Jefferson Ave Suite 204
Murrieta, CA 92562

Phone: 951-290-3268
Fax: 951-894-8441
Murrieta Law Office Map

Firm Location
Review Us