CHICAGO--(BUSINESS WIRE)--Only a few weeks remain to lock in a federal tax deduction that is important to many families going through divorce, the American Academy of Matrimonial Lawyers (AAML) said today. The AAML’s members include 1,600 of the country’s top matrimonial attorneys.
The federal tax reform bill that passed last year removes the income deduction for alimony payments, but allowed for the existing rules to be applied to final settlements put in place before January 1, 2019.
“We urge anyone currently going through divorce proceedings to ask their attorney about the tax law change and its potential impact on their settlement,” said Peter M. Walzer, AAML’s president and a partner at the law firm Walzer Melcher LLP in Woodland Hills, CA. “Waiting until 2019 could result in more alimony money going to taxes instead of household expenses.”
The AAML offered key points on the alimony deduction:
- Middle class families could be the most impacted by the new law. The potential impact varies by tax bracket for both former partners.
- In some cases, both ex-spouses can lock in tax benefits by finalizing the agreement this year. Therefore, you should look into the issue if you expect to pay or receive alimony as part of a final settlement.
- The alimony agreement needs to be in a final settlement or court order – not a temporary agreement – in order to maintain the deduction.
- Finally, even if you are not going through a divorce check with your attorney if you have a premarital agreement that includes an alimony provision. The agreement could be tied to assumptions about tax implications that soon will be out of date.
About AAML
Founded in 1962, the mission of the American Academy of Matrimonial Lawyers (AAML) is to provide leadership that promotes the highest degree of professionalism and excellence in the practice of family law. Comprised of the top 1,600 matrimonial attorneys throughout the nation, members are recognized leaders in the areas of matrimonial law, including divorce, premarital agreements, separation, annulment, custody, property valuation and division, support, and the rights of unmarried couples. AAML Fellows are recognized by judges and attorneys as preeminent family law practitioners, possessing a high level of knowledge, skill, and integrity and earning reputations for professionalism, competence, and integrity.
To find an attorney in your area, visit http://aaml.org/find-a-lawyer.
