You may have heard that the Tax Cuts and Jobs Act of 2017 is going to change the way Alimony is handled for tax purposes. In 2018 and prior, the payer of alimony enjoys a tax deduction and the recipient of the alimony pay tax on it. The new rule eliminates this practice. The change only affects divorce agreements signed in 2019 and forward. Any agreement signed before the end of 2018 will still be governed by the old rules. However, if you modify any legacy agreement after December 31, 2018, your revise agreement will be subject to the new rules.
As always, consult with your tax professional at Ketel Thorstenson about these or other tax matters because each situation is different. Don’t navigate the difficult and ever changing tax codes and legislation on your own. Ketel Thorstenson CPAs and tax professionals receive advanced training and continuing education all year long to keep our service on the forefront of the tax industry. Call us today for guidance on tax planning, tax return preparation, and/or Tax Reform (the Tax Cuts and Jobs Act) affects or questions.