Divorces could get more costly under new tax law
BAKERSFIELD, Calif. (KBAK/KBFX) —
If you're waiting to finalize your divorce, don't wait too long, changes are coming at the end of the year.
The new rule takes effect Jan. 1 and it changes who pays taxes on alimony for every divorce starting in 2019.
"There's a big rush on right now to try and get the divorce finalized," David Klasing, a Bakersfield tax attorney, said. "Any divorce that drags into 2019 is, is potentially a problem."
Right now, the person paying alimony gets to write it off on their taxes and the person getting alimony pays the income tax on it. For divorces finalized in 2019 and beyond, alimony will no longer be a write-off or income, so the person paying is stuck with the taxes too.
"You can imagine that there’s a lot of delays happening right now for folks that would like to receive non-taxable alimony," Klasing said.
He said the government is the only one benefiting from this change. It's projected that the federal government will get $6.9 billion dollars over the course of a decade.
"I think it's going to have a chilling effect on divorce. People are going to have to think twice about whether they can actually afford it," Klasing said.