Deductions for Alimony Ending12/31/1018
“Tax Cuts and Jobs Act of 2017”. Those interested in getting a divorce should consider moving quickly, especially those in long-term marriages (10 + years). If is likely to be a component of your divorce settlement, you want to go to judgment before 12/31/2018 to take advantage of the tax deduction for those paying alimony. As of 1/1/2019, this deduction will no longer be available. Since the deduction is an “above the line” deduction, it reduces the payor’s gross taxable income, often putting the payor in a lower tax bracket, resulting in a higher alimony amount for the recipient who pays taxes on the alimony, but usually at a much lower tax rate. The result post 1/1/19: greater taxes for the payor and smaller amounts of alimony for the recipient!