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2019 divorcees will want to pay attention to tax changes

| Apr 20, 2020 | Divorce |

It is not so unusual these days to know someone who has divorced, or to go through a divorce yourself. For those in Texas who divorced in 2019 and have yet to file their taxes, there are changes that they should pay attention to, specifically regarding alimony.

Prior to 2019, those who received alimony — also known as spousal support or spousal maintenance — had to report it as income. In addition, those who paid alimony were able to deduct those payments from their income taxes.

However, the Tax Cuts and Jobs Act changed that. Starting with those who divorced in 2019 and moving forward, those who receive alimony no longer must count it as income for tax purposes, but those who pay alimony cannot deduct the payments on their income taxes. These changes do not apply to those who divorced in 2018 or earlier.

For tax purposes, alimony has a specific definition. There must be a written document that explicitly states that one spouse is paying their ex alimony. These payments must be in cash. Child support payments do not count as alimony, and alimony payments cannot continue after the receiving spouse dies. Finally, both parties cannot reside together.

Alimony can be a tough subject for exes to talk about. After all, the amount of alimony paid must be fair to all involved, and it will have a major impact on both parties’ financial situation. Those who are working out alimony details in the divorce process, or those who divorced in 2019 and have questions about alimony will want to seek legal advice, which this post does not provide.

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