How can my Greensboro Family Law Attorney explain how the new tax law will affect my divorce?
The details of the Trump tax plan have been hot topics in the recent news. While corporate tax cuts and doubled standard deductions have consumed media coverage, if your family structure is changing, other details deserve your attention. For those going through or contemplating a divorce or separation, two tax law changes can have a major impact on your case and future.
- The Child Tax Credit
The latest tax reform increased the child tax credit from $1000 to $2000 per qualifying child beginning in tax year 2018. This could be advantageous for those of you who will continue to itemize your deductions. It also increased the threshold at which this deduction will begin phase out to $400,000 for married taxpayers filing jointly and $200,000 for all other filers. Therefore, the deduction will now be meaningful even to higher earners. Additionally, the refundable amount of the credit was increased from $1000 to $1400 per qualifying child and a new non-child dependent of $500 was added.
- Alimony
Currently alimony payments are tax deductible by the spouse paying alimony and includable in the gross income of the receiving spouse. For any divorce or separation instrument executed after December 31, 2018 alimony payments will no longer be deductible to the payor spouse and will no longer be included as income for tax purposes to the payee. This means that starting in 2019 alimony and child support will be treated the same. Moreover, any divorce or separation instrument executed prior on or before December 31, 2018 but, modified after than date have the option of employing either tax scheme.
The experienced family law attorneys of Garrett Walker Aycoth & Olson keep up to date on all current developments that affect their areas of practice. Consult with one of our knowledgeable family law attorneys today in our Greensboro Family Law office. Greensboro Family Law Attorney’s are here to help!
Also, for more information on other areas of the tax law visit:
http://docs.house.gov/billsthisweek/20171218/Joint%20Explanatory%20Statement.pdf