What Does the 2017 Tax Law Mean for Divorcing Couples?
In this excellent blog posting, Meredith Richardson interviews Financial Planner Jill Boynton on some of the impacts of the 2017 tax law changes on divorcing couples.
Alimony - beginning January 1, 2019, for any alimony orders issued from that date forward, the tax burden for alimony will no longer shift from the payer to the recipient. Instead, it will remain with the payer, who is often in a higher tax bracket than the recipient. The new law could mean that the payer can’t afford to pay as much alimony because there is no tax break, and the recipient will receive less alimony.
Personal Exemptions - this tax bill has done away with personal exemptions. You can no longer claim $4,050 for yourself, your spouse, and any dependents you may have. There will no longer be an issue as to claiming children as dependents, as children may no longer be claimed as dependents.
Child Tax Credit - The law has been that if you claimed a child as a dependent, you could claim the child tax credit for that child. Now, you can no longer claim a child as a dependent, but you can claim a child tax credit.