Divorce can have a devastating impact on every area of your life, especially when it comes to your finances. If your spouse earned significantly more than you or you gave up your career or education in favor of caring for your home, the marriage, and any children you have together, you could be at a distinct disadvantage when trying to reenter the workforce. In these situations, spousal support may play an important role in your divorce proceedings and any resulting settlements or agreements. However, changes in the tax laws have the potential to impact your rights in regards to alimony over the course of 2019.
Your Rights to Spousal Support
When filing for a divorce in Middlesex County or elsewhere in the state, you may be entitled to an order for alimony, otherwise known as spousal support or maintenance. Under Section 2A:34-23 of the New Jersey Statutes, spousal maintenance may be included as part of your divorce settlement in cases where it is deemed reasonable by the court. Factors that a judge is likely to consider include:
- The length of the marriage;
- The age and health of both spouses;
- Each party’s income and earning potential;
- Any individually owned property or asset either spouse possesses;
- Whether one of the spouses made career or education sacrifices over the course of the marriage;
- The general standard of living enjoyed by the couple during their time together and the ability of each party to maintain that standard now that they are divorced.
Alimony can serve short term goals, such as allowing you to go back to school, start a new career, and generally adapt to divorced life, or it may be ordered on a more permanent basis.
How Tax Changes Could Affect Your Divorce Settlement
Traditionally, spouses with greater income or assets could pay alimony to their divorcing spouse and claim those payments as a tax deduction. At the same time, the one receiving alimony was required to list it as income, which required some advance planning. However, changes in the tax law now eliminate alimony as being claimed as a deduction and from being listed as income. Unfortunately, this could have a potentially negative impact in some divorce cases.
In 2019, the Internal Revenue Service (IRS) will be implementing changes under the Tax Cuts and Jobs Act (TCJA), which was put into effect by President Trump in 2017. This means that high income spouses who might have been motivated to be generous in alimony awards with an eye toward reducing their overall tax will no long have this financial incentive.
Our Milltown divorce attorney may be able to help minimize this impact by effectively negotiating an increased marital property settlement or by providing evidence as to why a certain amount of alimony is required. Ways you can help prepare for these changes include:
- Carefully document all of your expenses;
- Make a thorough list of all property and financial assets you and your spouse own;
- Determine the skills you need to reenter the workforce or the amount of time it might take to rebuild your career;
- Create a budget, factoring in items such as housing, food, and the care of children.
Our New Jersey Family Law Attorney is Here to Assist You
Orders and settlements in your divorce case play a major role in ensuring your future financial security. At the Law Office Of Jordan B. Rickards, we provide the trusted legal representation you need to get the maximum amount possible. To get out team working on your side, call or contact our Miltown, NJ divorce attorney online today and request a consultation.