The thought of getting divorced at any time of year is generally one of the last things people in Missouri want to rush through. The thought of hurrying to get divorced amidst the Thanksgiving, Christmas, Hanukkah and New Year’s season would be even less palatable to people under normal circumstances. This year, however, circumstances are anything but normal as a major change to the tax code set to take effect in 2019 will have major implications on divorce settlements nationwide.
According to a report by Bloomberg, the Tax Cuts and Jobs Act will shift the burden of paying income tax on spousal support monies from the recipient spouse to the paying spouse. In addition, the paying spouse will lose the deduction they have previously been given for these monies. Many believe that this change could make divorce agreements harder to arrive at with people far less willing to concede to making alimony payments.
While no spouse looks forward to paying alimony, the ability to get a tax deduction often acted as some sort of way to ease that burden and allow people to agree to paying alimony to a former spouse. Without that, spouses are likely to dig their heels in harder and resist these payments or push for lesser amounts or shorter payment periods.
In the end, the amount of money left for the couple to divvy up could be less as the paying spouse most commonly pays a higher tax rate than the receiving spouse so the overall amount of money to be paid on alimony could increase.