How Will the Federal Tax Reform Law of 2017 Impact Spousal Maintenance?

Kane County Divorce Attorneys Explain How Tax Laws Affect Spousal Support

Under current laws, spousal maintenance (alimony) payments are tax deductible for the spouse paying maintenance, and they are taxable as income to the spouse receiving the payments. This can result in tax savings for the payor, and usually in overall tax savings for both parties. However, The Tax Cuts and Jobs Act, which was passed by Congress in December 2017, will significantly change the way spousal support is taxed starting on January 1, 2019.

If you are already divorced and are either paying or receiving support, your tax benefits will not change once this law takes effect. However, if you are considering filing for divorce, it is important that you fully understand your potential tax exposure, whether you will be paying or receiving spousal maintenance. If possible, you may wish to finalize your divorce prior to December 31, 2018 in order to take advantage of the current tax laws.

While some divorces take a short time to be finalized through agreement, there are many instances where litigation and negotiation cause a divorce to take more than a year to complete. Prior to this change in the tax law, divorcing spouses and their attorneys have been able to use the tax deductibility of alimony to the advantage of both parties, which gives the incentive to finalize their divorce through agreement. Since divorcing spouses will no longer be receiving this potential tax deduction, it is less likely that spousal support will be awarded. This may also affect the division of marital assets and the allocation of marital debts.

Contact Our Elgin Divorce Attorneys

It is important to consult with a tax professional during divorce and work with an attorney who can help you understand how to allocate income and assets between divorcing spouses. The lawyers of Goostree Law Group work directly with accountants and financial advisors who can assist with obstacles that may arise when determining spousal maintenance. If you have questions regarding this new tax law and how it could impact you, contact our Kane County or DuPage County office for a free consultation by calling 630-584-4800.

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Goostree Law Group

Goostree Law Group

 555 S. Randall Road, Suite 200
St. Charles, IL 60174


 1770 Park Street, Suite 205
Naperville IL 60563


 400 S. County Farm Road, Suite 300
Wheaton, IL 60187


Our Illinois divorce attorneys represent clients in Kane County, DuPage County, Kendall County and DeKalb County, including Geneva, Batavia, St.Charles, Wayne, Wasco, Elburn, Virgil, Lily Lake, Aurora, North Aurora, Elgin, South Elgin, Bartlett, Crystal Lake, Gilberts, Millcreek, Maple Park, Kaneville, LaFox, Yorkville, Oswego, Plano, Sugar Grove, Big Rock, Bristol, Newark, DeKalb, Sycamore, Naperville, Wheaton, West Chicago, Winfield, Warrenville, Downers Grove, Lombard, Oak Brook, Streamwood, Hoffman Estates, Barrington, South Barrington, Lake Barrington, Schaumburg, Big Grove, Boulder Hill, Bristol, Joliet, Kendall, Lisbon, Minooka, Montgomery, Plainfield, Sandwich, Yorkville and many other cities.

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