The tax bill passed by Congress at the end of 2017 could dramatically affect your pocketbook for years to come. Especially if you are in the midst of divorce.
As the Chicago Tribune reports, a provision of the tax bill could make settling your finances with your ex much more difficult. Specifically, the new law takes away the ability to deduct spousal maintenance (commonly known as alimony) on your federal income tax return. Nobody who entered into a divorce judgment after Dec. 31 will get to take advantage of the alimony deduction.
Why does this matter?
Most Illinois divorce lawyers will tell you that the deduction is a common selling point when one spouse is asking for alimony. The paying spouse could balance out the cost of maintenance by taking advantage of a reduced tax bill. But now, the Tribune reports, spouses will be more reluctant to agree to pay, making it more difficult to hammer out a deal. Even when a working spouse agrees to pay alimony, the amount of available income could be lower, making things more difficult.
All of this could make settling divorce out of court tougher. In a survey by the American Academy of Matrimonial Lawyers, more than 60 percent of family law attorneys said they expect divorce to become more hostile in the U.S.
Your choice of divorce lawyer makes a difference
We hope this does not discourage you to get divorced if you are in a bad marriage and want to get out. Changes to the tax law may make things a little more tricky, but if you have an experienced divorce lawyer on your side, you can still expect a substantial portion of the marital property to maintain financial stability long-term.