GOP Tax Plan Eliminates Tax
Deduction on Alimony 2 NOVEMBER, 2017 Nancy A Hetrick On Wednesday, November 1, 2017, the House finally released their proposal for tax reform and one item on the list is to eliminate the deductibility of spousal maintenance / alimony for...
While alimony paid is currently deductible for those filing taxes in 2018, the new tax law will eliminate the tax
deduction on alimony for anyone who gets divorced in 2019 or later.
Not exact matches
These include
deductions for contributions to individual retirement accounts,
alimony payments, certain moving expenses, and interest
on student loans.
Can anyone comment
on whether this is a reasonable interpretation of the meaning of «
alimony,» and / or explain how the IRS might view it if the
alimony - paying spouse submitted a tax return as «Married Filing Singly» reporting the
alimony paid as a
deduction from taxable income?
These include
deductions for contributions to individual retirement accounts,
alimony payments, certain moving expenses, and interest
on student loans.
The adjustments — sometimes called above - the - line
deductions because you can claim them whether or not you itemize
deductions — include (among other things) deductible contributions to Individual Retirement Accounts (IRAs), SIMPLE and Keogh plans, contributions to Health Savings Accounts (HSAs), job - related moving expenses, any penalty paid
on early withdrawal of savings, the
deduction for 50 percent of the self - employment tax paid by self - employed taxpayers,
alimony payments, up to $ 2,500 of interest
on higher education loans and certain qualifying college costs.
Cavanagh v. Minister of National Revenue 2013 FCA 94 Income Tax —
Deductions in computing income —
Alimony Cavanagh was ordered to pay support in a specified amount per week as well as interest
on any payments in default, from the date of default.
You can deduct
alimony on your return regardless of whether or not you itemize
deductions on your tax return.
Pittsburgh Family Law Attorney Brian Vertz Continues Tax Reform Discussion
on New Laws,
Alimony Deductions
When negotiating a divorce settlement in 2019 or later, the new tax rule
on alimony and spousal maintenance can be factored into the settlement by reducing the amount of
alimony or spousal maintenance the paying spouse must send to compensate for the loss of the prior tax
deduction.
This is a significant development in family law, because during 2015, approximately 600,000 couples used the
alimony deduction on their federal tax returns.
As part of the U.S. Congress» drive to reform the tax system, one issue that kept
on arising was whether the
alimony tax
deduction would be repealed.
Do you think the provision to kill the
alimony deduction in the proposed Tax Cuts and Jobs Act will have a negative impact
on the majority of your clients?
Alimony is taxable income and a tax
deduction for the spouse who pays, but you will not be taxed
on awarded assets.