Lifetime Planning

Patricia Barrett CFP CDFA

832-858-0099

  • About Us
    • Getting Started
    • Summary of Divorce Services
    • Frequently Asked Questions About Divorce Financial Planning
    • Testimonials
  • Cooperative Mediation
    • Cooperative Divorce Mediation
    • How Texas Mediation Works
    • Divorce Mediation Articles
  • Divorce Financial Planning
    • Our Approach to Divorce Financial Planning
    • Community Property
    • Separate Property
    • Long Term Planning
    • Financial Planning Articles / Case Studies
  • Collaborative Divorce
    • Collaborative Divorce
    • How Collaborative Divorce Works
    • How We Help
    • Collaborative Divorce Articles
  • Events
  • Blog
  • Contact Us
You are here: Home / Articles / Divorce Planning / The devil is in the details of the new tax law for divorcing couples

The devil is in the details of the new tax law for divorcing couples

January 19, 2018 By Patricia Barrett

Let me just say, it pays to know how the new tax law may impact your divorce this year!

Much of the new law, (the “Tax Cuts and Jobs Act”), which both houses of Congress passed on Dec. 20, 2017, goes into effect in 2019. Yet, based on how these laws could impact your divorce in 2019, you may benefit from getting your divorce completed in 2018. There are also some changes that take effect this year. At the very least, you should talk to a Certified Divorce Financial Analyst, such as myself, to run the numbers and discuss your goals.

As I sort through the changes in this new law, I have discovered that the Affordable Care Act will be impacted and this will be of major concern for women who are divorcing. For example, the new law removes the penalty for lacking health insurance coverage in 2019.

Also, the Standard Deduction has been increased for everyone for 2018– Single: $12,000,  Head of Household: $18000, and Married: $24,000. However,  personal exemptions have been eliminated. Other changes that take affect this year include new tax brackets and changes in the Child Tax Credit. In addition, the new tax law is impacting rules around Capital Gains, IRAs, Pensions and 401(k)s, as well as Home Equity exclusions.

As I mentioned in my previous blog post, one change in the tax law may impact couples who are eyeing contractual alimony or spousal maintenance as part of their settlement agreement. Under the new law, divorced taxpayers who pay contractual alimony or spousal maintenance would no longer be able to deduct those payments from their income. And recipients of this alimony would also no longer need to report the money as income. However, this only applies to divorces finalized after Dec. 31, 2018. So, depending on whether you are planning to pay or receive contractual alimony/maintenance, you may want to speed up or slow down your divorce proceedings.

Be sure to discuss how this new law may affect your overall finances and your divorce with your Certified Divorce Financial Analyst, CPA or divorce attorney to determine your course of action if divorce is in your future.

Filed Under: Blog, Divorce Mediation, Divorce Planning, Divorce Planning, Financial Planning, Financial Planning Articles, Women's Issues for Divorce Tagged With: divorce finances, divorce financial planning, New tax laws and divorce

Contact Us

Call Patricia for a
Free Consultation
832-858-0099

From Our Blog

“Can I be reimbursed for money my spouse wasted during our marriage?”

“Can I be reimbursed for money my spouse wasted during our marriage?”

In a divorce, identifying, calculating and dividing property and assets can get very complex. Clients often ask me if they can be reimbursed in the divorce settlement for specific … [Read More...]

Lifetime Planning, LLC

Phone: 832-858-0099

  • Email
  • Facebook
  • LinkedIn

Areas Served:

Cities

The Woodlands
Alvin
Baytown
Clear Lake
Conroe
Cypress
Dayton
Downtown Houston
Fairfax
Fort Bend
Friendswood
Galveston
Hockley
Houston Heights
Humble
Jersey Village
Katy
Kemah
Kingwood
La Marque
League City
Magnolia
Memorial
Midtown
Missouri City
Montrose
Pasadena
Pearland
River Oaks
Shenandoah
Sienna Plantation
South Houston
Spring Valley
Spring
Sugar Land
Texas City
Tomball
Victoria
West University
Also serving all Texas cities working by email, phone, and fax.

Counties:

Harris
Montgomery
Liberty
Chambers
Galveston
Brazoria
Fort Bend
Waller

Disclaimer

Information provided in this website is not meant to be construed as legal advice and does not necessarily predict decisions that will eventually be made by a court of law. It is strongly recommended that you consult competent legal advice if your divorce includes children or property issues.

Copyright © 2023 Patricia Barrett CFP CDFA · All Rights Reserved

· · ·

Log in