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Upcoming tax changes can impact family law concerns

Timing can be everything. It can make a significant difference in a number of things ranging from the cost of an item to an agreement. For those Georgia couples contemplating divorce, timing may play a critical role. Based upon upcoming changes in the tax laws, there are a number of family law items which should be taken into consideration.

First of all, alimony is currently a deductible expense for the individual who pays it. Additionally, it is taxable income for the individual who receives it. Typically, the individual receiving alimony is in a lower tax bracket and thus pays less in taxes. However, beginning in 2019, alimony will not be a deductible or taxable item. This change in the tax law is not expected to impact agreements made prior to 2019.

Another upcoming change has to do with the family home. If the home is sold prior to the divorce, up to $500,000 in capital gains can be claimed without incurring taxes on these gains. However, if one spouse retains the home in the divorce and then decides to sell, only $250,000 in capital gains can be claimed without incurring taxes on these gains. This, along with property tax and mortgage interest deductions may make it advantageous to proceed with divorce and property settlement decisions sooner rather than later.

While tax laws are not the driving force in family law matters, they can have a significant financial impact upon the individual for years to come. As the Georgia couple decides that a divorce is what they desire, each individual will want to understand how each financial decision will impact his or her now and in the future. Experienced legal counsel can assist with this analysis and the decision making process.

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