People in Ohio who have agreed to end their marriage quickly learn how complex the process of getting to a final divorce agreement can be and why it often takes more time than they expected to complete their divorce. When the calendar changes next month from 2018 to 2019, a major shift will occur in the tax law that could have significant implications for divorces. Many believe that this anticipated change is actually pushing couples to rush to complete their divorces in 2018.
The change afoot involves how money paid as alimony is taxed. As reported by Bloomberg, the current tax code assigns the tax responsibility for these monies to the person who receives them since they are that person's income. In addition, the person who pays the alimony is allowed to deduct the payments from their income tax return.
For many spouses who find themselves facing the prospect of paying alimony, the ability to get a tax deduction for the amount paid has been part of how they were willing to agree to paying spousal support. The change in tax law may therefore make people less willing to agree to these payments at all, may make them willing to pay much smaller amounts or may make them willing to pay for a shorter amount of time.
For divorces already in the works that may possibly be completed by December 31, 2018, they will be able to take advantage of the current laws. This reality may well contribute to a big jump in the number of divorce settlements achieved in the latter part of this year.