If you and your spouse are thinking about getting a divorce, you might want to get it finalized before the end of the year.
Why the rush? The tax bill that President Trump signed in to law in December of 2017 takes effect January 1st, 2019 – and it could have a serious impact on your finances.
If you will be paying alimony or spousal support, you will be able to deduct those payments from your tax liability – this year and every year in the future - if your divorce is finalized in 2018. However, if your divorce is not finalized until 2019 or beyond, you will no longer be able to claim those payments as a deduction.
What if you are the spouse who will be receiving alimony? If you get divorced this year, you will have to pay taxes on the alimony you receive this year, and every year in the future. But if your divorce is finalized in 2019 or beyond, you will not have to pay taxes on the support received.
This new tax law could potentially lead to some conflict between you and your spouse. If you are the spouse paying alimony, you’ll want to expedite your divorce. However, your spouse may want to drag out the finalization of the divorce into 2019 if he or she will be receiving spousal support.
Here are three ideas that may help speed up the divorce process.
Have all your ducks in a row
The more you stay on top of things, the speedier your divorce will be. Pull together all of the financial documents, tax documents, mortgage papers, deeds, etc. that you will need to proceed with your divorce.
Try to avoid needless arguments over things that just lead to more problems. Working together with your spouse may allow your divorce to move faster. Anything you might lose monetarily can potentially be gained back with the money you save by finalizing your divorce before the new law takes effect.
Talk to your divorce lawyer
Tell your attorney that your goal is to finalize the divorce before the end of the year. This lets everyone know the end goal here, and may result in your ability to accomplish your specific goals regarding divorce and spousal support payments.
Ending a marriage is never pleasant, but finalizing your divorce in 2018 – and being able to take advantage of the tax deduction on alimony payments - might just make it a little more palatable.