The new year is underway, and with its start comes changes to how spousal support payments are taxed. Under this new law, alimony payments will no longer be eligible as a tax deductible and they will no longer be considered taxable income for recipients. These changes could have a substantial impact on the decisions one makes during divorce, and they may leave many individuals in California in search of advice in understanding all their available options.
With the changes to alimony tax rules, spousal support payments will no longer be any different than payments for the division of property. As such, similar concerns may play a more significant role during negotiations, as the parties involved may wish to consider all their available options. For instance, couples may have the option of reaching an agreement to forgo alimony and instead implement payments over time through the division of property.
While these changes will impact anyone who goes through a divorce after the start of the year, it may also affect those with temporary spousal support agreements in place. Those in search of alternatives to alimony may also benefit from understanding the risks involved. For example, the potential penalties for failing to make payments for the division of property are less severe than those for failing to adhere to the terms of an agreement for spousal support.
Going through a divorce can be stressful enough as is, and the changes to tax laws may only further complicate the process. For guidance in understanding these changes and how they might apply to one’s situation, a person could benefit from consulting with an experienced attorney. An attorney in California can provide a client with advice on every aspect of divorce and assist him or her in pursuing the best outcome achievable during legal proceedings.