Now may be the time to enter that divorce settlement

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Now may be the time to enter that divorce settlement

On Behalf of | Dec 5, 2018 | family law & divorce

It is December, and the year is rapidly drawing to a close. Even though the holidays tend to take up a significant amount of time, couples still attempting to resolve their divorce issues may want to speed up the process. If Illinois residents started out battling over their settlements, they may want to take a second look and perhaps make a more concerted effort to get that settlement completed before the end of the year.

The new tax laws take effect on Jan. 1, 2019, and that means that the rules regarding alimony change. Those who pay alimony will no longer be able to deduct it on their income taxes. In many cases, this means that alimony payments could drop, which could put the receiving party in a difficult financial position post-divorce. Therefore, the advantage of not having to pay taxes on alimony received may not make much difference.

If an agreement can be reached by the end of the year, the payor may continue to deduct the amount paid on his or her income taxes. This could be a powerful motivator for some Illinois couples to get through the process despite the holidays. Even those couples who have prenuptial or postnuptial agreements may not be safe from the tax changes. That is one area of the law that will probably be tested in the coming year.

If an Illinois couple has already started the divorce process, then it may not be too late if the change in tax law would affect them. Instead of waiting for the court to make decisions that might not come until next year, coming to an agreement outside of court could become a priority. If someone is unsure whether the new law will be an issue, now would also be a good time to find out.

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