There may be numerous crucial aspects to address during the end of a marriage, one of which being whether spousal support payments will be required. Addressing this aspect could be crucial, as these payments can have a substantial impact on one’s taxes. However, the laws regulating how support payments are taxed may change if a proposed tax reform bill in the U.S. Congress becomes law. Individuals who are considering divorce may find it advisable to speak with a family law attorney in Michigan for guidance on how this might affect them.
When a married couple decides to take separate paths in life, the resulting divorce will inevitably bring about change. In some cases, a divorce decree may dictate that one party must pay the other spousal support for a given period. Under current law, the spouse that makes the support payments may be eligible for a tax deduction, while the receiving party must report the amount under earned income.
If the tax reform bill were to pass into law, those who divorce after a certain date may no longer be able to receive a deduction for spousal support payments. Due to the way tax brackets work, this change could also result in a lower amount of assistance for the spouse who receives support payments. Such a change could have a significant impact on the outcome of many divorces and, in turn, on the lives of those involved.
With the rules and regulations surrounding divorce being subject to the possibility of change, an individual could begin to feel somewhat overwhelmed and in need of guidance. When facing divorce, a person could benefit from speaking with a family law attorney in Michigan for advice on every aspect of the process. An attorney can advise a client on any changes that may affect them and assist in pursuing the most favorable outcome possible during subsequent legal proceedings.
Source: Forbes, “How Tax Reform Could Radically Change Divorce“, Malcom S. Taub, Nov. 9, 2017