27 Feb What’s changing for alimony and taxes
Q. What’s different for alimony on my tax return from 2017 to 2018?
A. There are changes coming, but not for 2018.
Starting in 2019, the spouse who pays alimony will no longer take the alimony payments as a tax deduction, said Gail Rosen, a certified public accountant with Wilkin & Guttenplan in Martinsville.
At the same time, the spouse who receives the money no longer includes the alimony as income, she said.
“Anyone who has a divorce agreement in force before 2019 will be grandfathered in under the old rules,” Rosen said. “This means that going forward, if the agreement has an effective date of Dec. 31, 2018, the payor will continue to receive a deduction for any alimony paid and the recipient will continue to declare the alimony as taxable income.”
Rosen recommends anyone negotiating a divorce settlement adjust their negotiations based on the taxability of the transaction.
Email your questions to .
This post was first published in February 2018.NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.