If you are considering a divorce in Missouri, there are some changes this year regarding spousal support that may significantly change the outcome of your overall settlement. At Turken & Porzenski, L.L.C., our team of experienced professionals understand how to navigate the complex legal process and provide you with personalized service.
According to CNBC, the Tax Cuts and Jobs Act changed the tax rules on alimony as of January 1, 2019. For the last 70 years, the spouse making the support payments could deduct them on his or her taxes; the spouse receiving the payments reported them on their tax paperwork. As of this year, that is no longer true either. These changes may affect how couples view divorce.
Research shows that earnings for women with children fall by more than one fifth, while men with children often see income rise by about a third. Now that the payments are no longer deductible on taxes, there may be a significant reduction in the amount of spousal maintenance payments going forward. If the divorcing parties cannot come to an agreement, and they go to trial, the court's goal is to make the spouses’ standard of living equal.
As a result of the potential loss in the amount of alimony payments, equitable distribution of property may also change. Preexisting pre- and post-marital agreements may also be subject to new scrutiny. For example, if a pre-2019 agreement stipulated a $5,000 per month cap, the court may rule, given the non-deductible nature of the payments, to reduce the cap. Visit our webpage for more information on this topic.