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New year, new alimony tax laws

Laws are often under scrutiny, and even laws that have been in place for decades could suddenly see changes. Now that it is 2019, changes made to tax law regarding alimony are now in effect. Some people believe that the changes may make divorce more difficult for individuals in Utah and elsewhere.

The previous alimony tax law had been in place for 75 years. That law provided that the person paying the alimony could deduct that payment from his or her income. As a result, the deduction ended up saving them money. Now, the person paying does not get to make that deduction and will receive no tax benefit for making the alimony payments. Those who settled their divorces prior to the end of 2018 are still entitled to take the deductions for payments, and report the payments as income for recipients.

It is claimed that the new law will result in $7 billion in new tax revenue over the next decade. Of course, that benefit may not seem significant to those who will now be trying to determine alimony payments under this new law. In fact, this type of support may become more of sticking point and cause for conflict during divorce cases.

Even if Utah residents knew this alimony tax law was coming and wanted to get divorced before the new year, it may not have been possible. Divorce can be a long process, and if fights do erupt over spousal support, the process could become even longer. However, that does not mean that individuals cannot find ways to negotiate in efforts to reach an agreeable outcome. Knowledgeable divorce attorneys may be able to help concerned individuals find options for doing just that.

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