It’s crazy to believe that February ends today and tomorrow launches us into March. For those of us who are anxiously awaiting the arrival of spring, March brings us one month closer to sunshine and warm weather.

The talk of Easter, April showers, and May flowers makes us think about spring, which means that “Tax Day” is just around the corner! For those of you keeping a count, the deadline to file is in 48 days!

If you plan on using Wealth Builders as your tax preparer this year, remember to have all of your tax documents to our office no later than Friday, March 30 to ensure that your taxes are filed on time and that an extension need not be filed.

Anyway, for the past several weeks, we have been talking about Tax Reform and the many changes it brought with it. This week, we are talking about alimony.

divorceDivorce can be quite a costly event – from lawyers to dividing up joint property, your wallet can take a heavy hit through the process. However, up until recently, alimony payments were always deductible to the payer and the payments were taxable to the recipient. Like most of the other itemized deductions, alimony deductions didn’t make the cut.

Effective for all divorce agreements made or revised on or after January 1, 2019, the person making alimony payments is no longer allowed to deduct them. Furthermore, the person receiving the alimony payments is not required to claim those payments as income. For divorces and separations December 31, 2018 or before, no changes will apply.

Divorce lawyers are concerned this new revision will cause friction. Up until now, wealthier spouses were more likely to agree to pay larger alimony payments to former spouses due to the tax deduction they produced. The former spouse receiving the larger alimony payment was happy because he or she received more income than otherwise possible. Everyone wins – except Uncle Sam.

By allowing the larger income earner to “write-off” the alimony payments as a deduction, that money was not taxable at the higher income earner’s tax rate (likely 39.6%). The income was claimed by the former spouse at (most likely) a lower tax bracket. The government didn’t get as much in taxes as it could have.

This will throw a wrench in new divorce and separation mediation agreements since the incentive for the higher income earner to agree to larger alimony payments is no longer present. Only time will tell the true repercussions of the tax law changes.

If you have questions relating to the deductibility of alimony payments or any other tax issues, give our office a call! Our tax professionals have the experience and expertise to answer all of your questions. And best of all, the consultation is free! Call today and make your appointment.

Don’t forget that “Tax Day” is coming! If you’re looking for a trusted tax professional, give our office a call today! Learn why most of our clients stay clients for life. And, to sweeten the deal just a bit, check out our tax season promotional offer! Appointments are booking quickly, so call and reserve yours today!

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Fottrell, Quentin. “Under Trump’s Tax Law, You Now Have a Year to Avoid a Nasty Divorce.” Market Watch, 14 Feb. 2018,

Laryea, Brittney, and Shen Lu. “Tax Reform 2018 Explained.” Magnify Money, 22 Dec. 2017,