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Trump tax law affects alimony

Fortunately, many happy couples head towards the altar each year in Fort Worth, Texas, and Tarrant, Texas, persuaded that their lives thenceforth will be wedded bliss until death do them part in accordance with their sacred vows. Unfortunately, many of those marriages end calamitously in divorce, marking a definitive end to the gracious optimism with which the marriages began. At that time, the previous focus on romance and flowers is replaced by a laser-like focus on cold hard cash, who gets it and who pays it.

Now, former couples who are considering divorce will need to get advice about applicable tax laws. Reportedly, the tax law signed by President Trump at the end of 2017 will eliminate the deduction for alimony, also called spousal support or maintenance, for new divorce agreements. Before the new tax law, alimony payments could be written off by the person paying them, reducing their taxable income. However, because of the elimination of the deduction, the person making the alimony payments will no longer be able to write them off. Correspondingly, the person asked to make alimony payments will be less amenable to paying high amounts, since there is no longer a tax benefit to doing so.

Alimony originated in an era when homemaker spouses were more common and had less opportunity to earn their own living after a marriage ended than they do now. It was also based on very polarized stereotypes of the roles that men and women respectively were expected to conform to within marriages. Even now, it is typically the breadwinner, the person who brought in all or most of the income during the marriage, who is expected to continue paying a share of his or her income to the other person after the divorce. Because times have changed, however, states are beginning to recognize the changed culture of the 21st century and revisit their laws about alimony and the financial matters it affects, like the division of marital property and other assets.

Source: Chicago Tribune, "What could make divorces more contentious? The new tax law," Ally Marotti, Feb. 22, 2018

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