2019 tax law changes can add to stress of divorce

On Behalf of | Jan 3, 2019 | Divorce |

The new year has arrived, and many changes from the tax law passed last year will have an impact on divorces occurring in 2019. Divorce is not an easy process in Ohio. It can be very emotional and stressful to family relationships, and involve copious paperwork. The division of property and other assets can also be difficult. The changes brought on by the tax law could add to the stress.

The changes to alimony are significant. Alimony used to be deductible for the payor and taxable for the recipient. Now, the payor can no longer deduct it, and the recipient does not pay tax on it. While this change does not impact divorces previously settled, if the settlements are modified, they could be subject to the new law.

There are options when it comes to alimony. One option is to turn over an Individual Retirement Account (IRA). The advantage to this is that the recipient will pay the tax on the IRA. One may also wish to investigate the advantages of including other assets in the settlement. These should be carefully looked at from a tax stand point to determine the best short- and long-term scenarios.

Divorce is seldom entered into lightly in Ohio. With the advent of the rule changes for 2019, it may behoove a person to be deliberate and take time to consider all the options. While the added complexity can add exponentially to the stress of the situation, a family law attorney can help by facilitating understanding of the new rules one faces in 2019.