The end of the year is a time when many people start making plans for the next calendar year. While resolutions and goals may be popular with some Tennessee residents, making good choices and setting themselves up for happiness make take priority for others. For others, ending relationships and moving forward may be at the forefront of their desires.
Men and women who are working to end their marriages through divorce should be aware that, come January, certain aspects of their divorce settlements may change from what they could be if their settlements happen this year. In particular, alimony payments will no longer be tax deductible to payers after December 31 and alimony recipients will not have to pay taxes on what they receive in payments from their exes.
Legislation passed at the start of 2018 brought about this change, though anyone who finalizes their divorce will be subject to the current laws on the matter. That is to say, alimony settlements finalized by the end of December will still allow payers to deduct their payments from their taxable income. Anyone who is currently receiving or paying under an existing alimony agreement will not be affected by this change.
Individuals who are ending their marriages should look carefully at how this and other financial matters may impact them as they plan for their new, separate lives. An attorney can be a good resource for anyone who wants to weigh their options on how best to address the change in tax laws that could affect their alimony settlements. As with all posts on this blog, readers are asked to seek their own counsel as this article offers information only.