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20 S. Santa Cruz Ave., Suite 212, Los Gatos, CA 95030
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Recent Changes to Tax Laws May Affect Divorce Cases

Posted on in Divorce

Santa Clara County alimony attorney tax lawsThe Tax Cuts and Jobs Act has been a major topic of discussion over the past year, and many people have been affected, whether positively or negatively, by the changes implemented in this law. Those who are in the midst of a divorce case or completed their divorce in the past year will need to understand whether they must file their taxes differently than in the past. In addition, alimony tax laws have been altered drastically, and this has resulted in increased conflict in many cases.

Spousal Support/Alimony Taxes

New laws have changed the way both payors and payees of spousal support claim these payments on their taxes. Those who pay alimony will no longer be able to deduct the spousal support from their taxable income, and those receiving it will no longer have to claim it as taxable income unless the parties otherwise agree. This may not have a large impact on some spouses, but for those in high-asset divorce situations, the money gained or lost could be significant, to say the least.

According to CNBC, the “divorce subsidy” that was previously available was responsible for saving some of California’s top earners as much as 50 percent in taxes. Those savings were enough of an incentive for many people to agree to more spousal support and settle their divorces out of court. Without this incentive, high-asset divorces may be more complicated and drawn out, and the payors of spousal support will be more likely to try to work out deals that will benefit themselves rather than their soon-to-be-exes.

The obvious result of this situation is that lengthy divorce cases will be more costly and time-consuming, resulting in more parental conflict in divorce cases involving children and more stress for all parties involved. In order to protect your rights and finances, it is more important than ever to have knowledgeable legal counsel. For those who have obtained a judgment or order prior to the end of 2018, alimony will continue to be taxed as before. 

Consult a Los Gatos Divorce Attorney to See How the New Laws Affect Your Situation

For those who are going through a divorce that will likely involve spousal support, it is important to work with an experienced attorney. A skilled Los Gatos, CA spousal support lawyer can help you make sure that the correct amount of alimony is determined in your case, ensuring that you will be able to maintain financial security once your divorce has been finalized. The Ventresca Law Office will refer you to a certified public accountant for advice concerning the new tax law changes, if you do not have one. Call 408-395-8822 to set up your free consultation today.


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Los Gatos, CA 95030

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