Family law attorney Richard Smalley explains recent changes to tax laws affecting tax treatment of spousal support
As part of the Tax Cuts & Jobs Act (TCJA), tax treatment of spousal support has undergone a major overhaul. Richard Smalley, Esq. provides some pointers.
Correspondingly, the payee spouse has to report such spousal support as their income and be responsible for the income taxes on it. Because payor spouse tends to have higher income than the payee spouse, it often results in a net tax benefit by shifting pre-tax dollars from the payor spouse to the payee spouse.
In his new article, Oklahoma lawyer Richard Smalley1 provides a brief overview of these issues. The complete article will be published on his Blog at https://richardsmalleylawblog.family.blog/
Under the TCJA, spousal support payable under a divorce decree or settlement agreement finalized after December 31, 2018 is no longer deductible by the payor spouse nor reportable as income by the payee spouse. This is also true for any modifications to existing settlement agreements, but only if the agreement explicitly provides that spousal support will no longer be deductible by the payor spouse.
The change poses a significant consideration for practitioners. Attorneys representing payor spouse must recognize that the support being awarded or agreed upon in 2019 and forward will represent a substantially higher financial burden for the payor spouse. At the same time, payee spouse will now receive such support without worry for income tax burden. Payor spouse’s attorney will need to focus on lowering the support amount in litigations and negotiations to accurately reflect the fact that spousal support award can be lower and still provide same financial support to the payee spouse. Attorneys for payee spouse will need to focus on maximizing the financial benefit to the payee spouse and also ensure that support award or agreement does not overcompensate for the change in tax law, resulting in an unduly reduced spousal support.
Navigating the constantly shifting tax laws and their implications on family law cases requires the assistance of an experienced family law attorney. Individuals are encouraged to discuss the potential ramifications of the TCJA on their cases with a qualified family law attorney.
Richard Emory Smalley3, III
Richard E. Smalley2, III is an attorney in Norman, Oklahoma. He is an AV-rated trial attorney with more than 30 years’ experience. Mr. Smalley focuses on family law matters, including divorce, custody, child support, divorce modifications, paternity, and guardianship. He is also experienced in probate matters and wills. The practice presently includes, trial work, divorce, post-divorce modifications, child support collection, child custody litigation, paternity, guardianship, adoption, probate and wills. Mr. Smalley has been appointed by judges and attorneys to serve as the Guardian ad Litem for children in dozens of contested child custody cases, and serves as a mediator in family law cases.
References
Website: http://smalleylawfirm.com/richard-e-smalley-iii/
Blog: https://richardsmalleylawblog.family.blog/
News: https://hype.news/richard-e-smalley-iii-family-lawyer-us/
Attorney Profile: https://solomonlawguild.com/richard-e-smalley%2C-iii
Attorney Profile: https://attorneygazette.com/richard-e-smalley%2C-iii#2d2e7913-7e09-4dcc-8c60-1f89053f64cd
http://www.americanregistry.com/business/richard-e-smalley/290254
https://www.linkedin.com/in/dick-smalley-8a3b799/
Richard E. Smalley, III
The Smalley Law Firm
+ +1 405-801-2222
email us here
Visit us on social media:
LinkedIn
WATCH NOW: Fox 23 News Tulsa: Make sure you know these new laws for Oklahoma at https://www.youtube.com/watch?v=XzA_bZcWLZ0
1 https://richardsmalleylawblog.family.blog/
2 https://hype.news/richard-e-smalley-iii-family-lawyer-us/
3 https://attorneygazette.com/richard-e-smalley%2C-iii#2d2e7913-7e09-4dcc-8c60-1f89053f64cd