Ending a New Jersey marriage is not easy for either party. Still, the spouse who earned less in the marriage may feel particularly nervous about his or her financial future following divorce. Fortunately for this party, alimony exists in an effort to bridge the financial gap and help that individual stay afloat financially. The problem, though, is that the alimony deduction that currently exists for paying spouses will soon disappear, which may have an adverse impact on both spouses.
For over seven decades, spouses paying alimony could deduct their alimony payments from their federal income taxes. Meanwhile, the spouses who received the alimony paid taxes on the income. This will no longer be the case for tax years after 2018, when the alimony deduction will be eliminated. Lawmakers say that removing the deduction will help to raise more than $8 billion in tax revenue during the next decade.
Others say this will no doubt harm the spouse making alimony payments. After all, that individual is already saddled with financial burdens following the end of a marriage. But many say it will also hurt those who expect to receive alimony, as they will lose a significant bargaining tool during the divorce negotiation process.
Fortunately, a New Jersey family law attorney can provide guidance to make sure that a spouse's wishes and needs are acknowledged during the divorce negotiation process. The attorney can also help the client if the couple end up going to trial to sort out issues such as alimony and the division of property. The attorney's ultimate goal is to make sure that the client's rights and best interests are protected during each step of the divorce proceeding.
Source: dmagazine.com, "Divorce Just Got More Complicated", March 30, 2018