Birmingham, Mich. – December 26, 2017 – Jessica Woll, managing partner of Woll & Woll, P.C., a Michigan-based divorce and family law firm specializing in child-centric divorce℠ matters and complex family law issues, says the new Tax Cuts and Jobs Act holds a surprising change for those paying alimony.
Under current law, alimony payments are a deductible expense and included in the recipient’s income, but that will all change under the new tax law, when the payor no longer gets a deduction and the recipient no longer counts the payment as income. The new law applies to agreements entered into after December 31, 2018 or earlier agreements that are amended after December 31, 2018.
“The way the law has treated alimony payments has been a very useful tool in settlement negotiations,” Woll said. “Usually, the recipient is in a lower tax bracket than the payor and the tax deduction gives the payor a break. Therefore, under the new law, we no longer have that bargaining chip.”
About Woll & Woll, P.C.
Committed to excellence in child-centric divorce℠ matters and complex family law issues since 1994, Woll & Woll specializes in divorce and family law, including legal separation, post-judgment of divorce matters, removal of domicile actions, stepparent adoption, custody, child support, paternity and other family issues. Learn more at http://www.wollandwollpc.com.