People who pay spousal support in Texas are accustomed to writing this expense off on their taxes. However, alimony may be one more expense that people cannot deduct during tax season.
According to CNN, a new tax code says that people will no longer be able to deduct alimony payments on their tax returns each year. Previously, spousal support was a deductible expense. While some people who have been divorced for many years may think that they will need to pay taxes on their alimony, this is not necessarily the case. This new tax bill is expected to affect only people who divorce after the end of 2018. In 2015, roughly 600,000 people deducted alimony when they filed their tax return.
Some people have suggested that the new tax bill might make divorce settlements more complicated. Some families may experience difficulties as they divide their assets and determine how much child support one parent needs to pay. Some attorneys have suggested that families with lower incomes may be most affected by this change. Additionally, this change may also affect people who have prenuptial agreements. Some people may need to take taxes into consideration as they draw up these agreements.
Some people have worried about the effect this new bill could have on people after they divorce. CNBC says that divorce experts have suggested that some people may be unable to contribute as much money to their retirement accounts, as more of their expenses will be subject to taxes. Others have said that this bill may mean that some people might receive less alimony than they would have previously.
