2019 is here, bringing big changes for high income divorces in Tennessee

Now that 2019 is here, the new tax code is in place regarding alimony income. If you don’t spend your time obsessing over tax changes like divorce attorneys and CPA’s do, you may not be aware that the new tax code changed how the IRS treats alimony. Previously, spousal support was taxed as income to the recipient. In some cases this was a minor change, but in high asset divorces where a wage earner is in the 25% or higher bracket while the other spouse was in the 10% bracket, this gave divorcing spouses a lot more marital money to play with in divorce proceedings. This is gone, and as the tax code stands right now alimony for divorces finalized on or after January 1, 2019 will not be able to divert this income for tax purposes. This means from here on out, the payor is responsible for taxes and not the recipient of the alimony, so all alimony will need to be looked at in net numbers and there will be less marital income to use to satisfy the need of the recipient spouse. Personally, I hate this change. If the parties were still married, they would have the benefit of being able to file a joint return and get some tax relief. It is almost as if the federal government is deliberately trying to punish persons for getting divorced. Unfortunately, the only people punished will be high wager earners.

Can’t find what you are looking for on our website? Did this article create more questions than it answered? Call our office (615) 620-5848 to set up a consultation with divorce attorney Morgan Smith, named 10 Best in Client Satisfaction for four years in a row by the American Institute of Family Law Attorneys, and a Three Best Divorce Attorney for three years in a row; We practice primarily in Davidson County (Nashville, Tennessee), Sumner County (Gallatin, Tennesse), and Williamson County (Franklin, Tennessee)