While divorcing at any time impacts the manner in which you must file your taxes, those who divorce in 2019 or after face additional tax considerations as a result of recent law changes. Some of the new tax laws that recently took effect can have a substantial impact on how much you pay and how much you can expect to get back when you file. Therefore, the more you understand about the new tax laws and how they may you affect you after you divorce, the less likely you are to get an unpleasant surprise, come tax time.
So, just how could new tax laws affect you when you divorce in 2019 or beyond?
New tax laws impact those getting divorced in 2019 and after in some significant ways. Those who pay or receive alimony or spousal support will see some particularly noticeable changes. Until this year, the spouse who paid support was able to deduct the amount of alimony paid from his or her total income. The other spouse, meanwhile, reported the alimony payments as his or her own income. Moving forward, spousal support payments will no longer be tax deductible, which means many divorcing parties may fight harder than ever to avoid having to pay the other party support.
Exemptions no longer apply
If you and the person you are divorcing also share children, there are other important tax changes of relevance to you in 2019 and thereafter. For example, until now, you could list your children as exemptions on your tax returns, but instead, you now get a child tax credit. For many people, this means your children likely will not give you the same tax deduction they once did. This can have a considerable effect on your tax refund, both in regards to how much of a refund you receive and whether you receive a refund at all.
Divorce changes your life in many ways, and the first time you file your taxes after splitting from your spouse, you may feel overwhelmed. Over time, though, the process gets easier. Having a clear understanding of how your divorce impacts your taxes can help decrease the chances of making tax-related mistakes.