You may have to repay some of the advance child tax credit next year. Here’s what to know
As professionals, we must consider how to address the ripple effect of the repeal of the alimony tax deduction and other uncertainties in the new tax law. Divorce has become a tax strategy game with no clear direction.
Many couples who are racing to divorce in 2018 may be surprised to learn that even though the tax character of alimony remains unchanged in 2018 and will be grandfathered, other changes in personal and business income taxes will absolutely impact their financial outcomes. Clearly, the spectrum of changes in the “Tax Cuts and Jobs Act” (H.R. 1) for individuals ranges from tax brackets, deductions, and tax credits to tax shelters.
Most of us do not give it another thought and simply assume we can contribute to an IRA if we meet IRS income criteria. But what if your only source of income is alimony? Guess what – the new tax law changes may just eliminate your only means to save in a retirement account.
Couples who have made the decision to divorce in 2018 may be surprised to learn that changes in personal and business income taxes will impact the financial outcomes of their divorce. It is unclear if the new tax rules will make divorce more or less difficult to negotiate legally or financially.