Welcome to 2019 and a delayed provision of the tax reform, also known as the Tax Cuts and Jobs Act (TCJA). For divorce agreements entered into after December 31, 2018, or pre-existing agreements that are modified after that date to expressly provide that alimony received is not included in the recipient’s income, alimony will no longer be deductible by the payer and won’t be income to the recipient.
This is in stark contrast to the treatment of alimony payments under decrees entered into and finalized before the end of 2018, for which alimony will continue to be deductible by the payer and income to the recipient.
Having the alimony treated one way for one segment of the population and the exact opposite for another group of individuals seems unfair and may ultimately make its way into the court system. But in the meantime, parties to a divorce action need to be aware of the change and compensate for it in their divorce negotiations, for a decree entered into after 2018.
Taxpayers with disabilities may qualify for a number of tax credits and other tax benefits. Parents of children with disabilities may also qualify. Listed below are several tax credits and other benefits that are available if you or someone else listed on your federal tax return is disabled.
In the tax industry, we have been working to combat the threat of hackers for many years. When a security breach of the scope of the recent Equifax cyber security incident takes place, many clients are affected and concerned about how this may affect their financial lives.
What you need to know.
From May through July of 2017, Equifax reported unauthorized access to approximately 143 million American’s personal data, including names, social security numbers, birth dates, and in some instances driver’s licenses. In addition, some 209,000 credit card numbers were accessed.
If you are in the midst of a divorce, if one is on the horizon, or if you are involved in a dispute with an ex-spouse over the terms of your divorce, you need to be aware that divorce agreements establish your rights related to each other under state law but do not bind those who are not parties to the divorce, including the IRS, to the terms of the divorce.
As a result, the IRS will follow federal law as it applies to a tax issue and ignore what the divorce decree specifies. Where there is a dispute between ex-spouses over the application of federal tax law and the divorce decree, federal tax law will prevail, and if one spouse feels they are paying more taxes than they are supposed to, their only recourse is to go back to state court and seek a monetary award.