At the end of 2017, the federal government passed a massive tax overhaul that had repercussions for many areas of American life. However, those that affect Wisconsin men and women going through divorce are not set to take hold until the clock strikes midnight on Jan. 1, 2019. One of those changes can have a big effect on later-in-life divorcees.
At present, individuals who pay alimony are allowed to write those payments off of their taxes. But, this is about to change. Under the new tax laws, payers of alimony must pay taxes on these sums and individuals who receive alimony will not have to declare their received payments as income. Readers may wonder: how will this shift affect parties to gray divorces?
One way is in whether payer spouses will be as willing to pay their exes as much in support as they would have if the tax laws had remained the same. If a retired individual cannot write of the alimony payments that they make to their former spouse, then they may see their savings dwindle. With some older divorcees on fixed incomes, they may struggle to stay current on their alimony payments while still providing for themselves as single adults.
Another way, it may affect gray divorcees is through those parties’ property negotiations. If a payer has concerns about keeping up with alimony payments and managing their tax obligations, they may be less willing to make concessions when it comes to sharing property with their soon-to-be exes. Gray divorce is never easy, but certain matters may get tougher as the New Year comes into being. Readers with questions about this and other matters may wish to consult with their family law attorneys.