Want a Divorce? Then Do It Right Now or Pay Much Bigger Tax Bill

If you are in the process of finalizing your divorce, then you may very well pay less in taxes for many years to come if you can complete it by December 31, 2018. The high-earning spouse typically pays spousal support to the non-working or low-earning spouse for a number of years. Spousal support payments have been tax-deductible to the paying spouse and taxable to the receiving spouse until the Tax Cuts and Jobs Act of 2017 changed this tax treatment making spousal support non-deductible to the paying spouse and non-taxable to the receiving spouse as explained in this article. However, wealthy couples may be unable to complete their divorce agreements in time simply because they have more valuable and complex assets and rushing to complete the divorce by year end may not be the optimal solution.

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