January is here and a new year has begun. People strive to remake themselves in the new year through resolutions and other changes. One of those changes is divorce and consequently January has become known as divorce month. For any one divorcing in Florida or elsewhere in Jan. 2019 or later, that divorce may be more expensive.
A new tax law was passed at the end of 2017 and some of the components of that law did not go into effect until Jan. 1, 2019. One of those changes concerns how alimony is now handled for tax purposes. Before January 1, the higher-earning partner who was paying alimony could deduct the amount of the alimony from his or her taxable income. The change brought about by the tax law states that the person paying alimony must pay it with after-tax income and will not get a deduction, as it was under the old law. The recipient now has no tax liability for the alimony received.
Another change that went into effect on January 1 is the deduction for state and local taxes. Under the new law, the deduction for state and local taxes is limited to $10,000. State and local taxes include not only income taxes but property taxes as well. With a limit of $10,000 it could make it more difficult for one partner to remain in the family home and could require a move to downsize.
Divorce is seldom easy and frequently expensive. The new tax law has added to the probability of divorce becoming more expensive than in previous years. A person in Florida who is considering divorce could benefit from seeking the advice of an experienced family law attorney.