Serving Clients in Knox, Blount, Anderson, Loudon, Sevier & Roane Counties

Tax Changes and Divorce Planning

We’re entering a “new era” of divorce planning because of the Tax Cuts and Jobs Act (TCJA) of 2017. Rose Swanger, CFP®, RICP®, CDFA®, EA explains, “for new divorces that are finalized after Dec. 31, 2018, all alimony payments will be treated like child support payments, which are not deductible. Before, the alimony payor could deduct the amount of their alimony payments – no matter how large the amount was – from their income, and the recipient could pay a lower tax rate on their payments.” This tax code change has direct impacts on certain matters in family law. You can learn more about the changes in Rose Swanger’s blog, on Investopedia:  A New Era of Divorce Planning | Investopedia