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How the Alimony Deduction Could Affect Your Tax Return

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Despite major changes made to the federal tax code in 2017, IRS officials estimate that this year’s tax refunds should be in roughly the same amounts as last year and issued by mid-May. There are, however, concerns that many tax refunds will end up being much lower than in prior years and that it will take longer to issue those refunds to taxpayers. These concerns have largely been attributed to the changes made by the Tax Cuts and Jobs Act, which officially went into effect for this year’s tax filing season. One of the biggest changes made by this law was an amendment to the rules regarding alimony payments, which are no longer considered tax deductible by the paying spouse. For help determining how the new alimony deduction could affect your own tax return, please contact an experienced Fort Lauderdale alimony attorney who can advise you.

What the New Tax Rule Means for Your 2019 Tax Return

Under the terms of the recent revisions to the tax code, the new alimony changes will apply to the returns of couples whose divorces were final at the beginning of 2019 and will remain in effect until 2025. According to the rule changes, taxpayers who pay alimony can no longer deduct any alimony payments made to a former spouse on their federal and state income tax returns. Those who receive alimony payments, on the other hand, are no longer required to report those payments as income for the year that they were received.

It is important to note, however, that the rules for reporting alimony either received from or paid by an ex-spouse will remain the same for divorces finalized prior to January 1st of 2019. This means that alimony will still be considered tax deductible for the payor who will be required to enter the full amount of spousal maintenance that they received on a Form 1040. Similarly, payors can still deduct any alimony payment they made during the year.

Refunds Delayed Due to Alimony Reporting Errors

In most cases, the IRS attempts to have electronically filed tax refunds issued to taxpayers within three weeks, while paper returns take a bit longer, at an average of around six weeks. This means that those who file their taxes online on or around the April 15th deadline can expect to receive a return as soon as the beginning of May. There are concerns, this year, however, that refunds could be delayed by weeks or even months if those who were divorced in 2019 fail to take the new changes to the tax code into account by adjusting their tax returns, which includes removing alimony payments from deduction and income calculations.

Call Today for Help with Your Alimony-Related Questions and Concerns

For more information on how your own divorce could affect your tax refund, please contact dedicated Fort Lauderdale alimony attorney Sandra Bonfiglio, P.A. at 954-945-7591 today. You can also reach a member of our legal team and set up a free case review by completing one of our online contact forms.

 

Resource:

irs.gov/forms-pubs/clarification-changes-to-deduction-for-certain-alimony-payments-effective-in-2019

https://www.sandrabonfiglio.com/the-permanent-alimony-presumption/

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