Going through a divorce? The new Tax Law, The Tax Cuts and Jobs Act, makes sweeping changes that will affect your divorce.
After December 31, 2018, you can no longer deduct alimony or what we now call maintenance or spousal support. After December 31, 2018, if you are receiving alimony or maintenance, you do not have to report it as income unless the divorce agreement was executed or modified before the end of the year.
Even if you enter into your divorce agreement or modify your agreement before December 31, 2018, you will no longer be able to deduct maintenance or spousal support if you are living in the same residence or on separate floors.
There are other changes that will affect your divorce.
Divorcing couples often bicker over who gets to claim certain deductions.
The new Tax Law does away with a number of deductions.
If you move out of the house, you will not be able to deduct your moving expenses as of December 31, 2017 unless you are on active duty with the military.
Beginning in 2018 until 2026, the personal or dependency exemption value is reduced to zero.
The good news is that even though you will not be able to claim the dependency deduction for your children on your Federal Tax Returns, you can still claim them on your Illinois Returns.
The Child Tax Credit has increased from $1000.00 to $2000.00 and $1400.00 of that is refundable.
Make sure your attorney is aware of these sweeping changes in the Tax Statutes and how they impact your divorce.