If you count yourself among the many people across Florida who expect to divorce this year, know that recent changes to tax laws may have far-reaching effects when it comes time to file your taxes. Whether the new changes will impact you will depend on several circumstances, such as whether you have kids or expect to seek or have to pay alimony. Many going through a divorce in 2019 or after will find that at least some of these changes affect them.
So, what are some of the new tax laws that take effect this year, and how may they impact your taxes?
Arguably one of the most notable changes to this year’s tax laws is one that will impact those who plan to have to pay or receive alimony. Until this year, the ex-spouse who paid alimony would be able to deduct those alimony payments from his or her taxable income. The person on the receiving end of those alimony payments, meanwhile, would have to include the income received through alimony as part of his or her taxable income. In simpler terms, there is no longer any real benefit for the person who pays alimony, and this could potentially lead to ugly court battles anytime one party in the marriage pursues it.
Tax deduction changes
Until this year, parents who went through divorces would need to figure out which one of them would claim any shared children as dependents, because the parent who did so would get a substantial tax deduction for each child. This year’s new tax laws essentially swapped out the exemption for each dependent and replaced it with a child tax credit. In many cases, tax filers are finding that their children no longer save them as much as they once did.
Divorcing your spouse can have far-reaching effects, and it can have a major impact on how you file your taxes. The more you understand about the ways in which these laws will affect you, the less likely you are to receive an unpleasant surprise when you file.