Dr. Friday explains how alimony tax treatment differs depending on divorce date. She notes that most post-2018 agreements are no longer deductible to the payer.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Divorce, alimony, really doesn’t make a big difference to be quite honest, because none of it’s tax deductible anymore.
If you got divorced after 2018, your alimony or your payments of any kind going to your ex are not going to become deductible.
If you divorced prior to 2018, you still have that deduction in play.
So if you’re looking at divorce and you’re the one that’s the breadwinner, you might want to take into account how much you’re gonna be paying in taxes because the other person will be paying zero. Very interesting way to work out a deal.
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