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Alimony and Tax deadline for 2018!

The Tax and Job Cuts Act of 2017 permanently repealed the tax deduction for alimony paid under a divorce instrument signed on or after January 1, 2019. The repeal affects the alimony tax deduction currently available to the alimony payor under Internal Revenue Code § 215 and the inclusion of alimony as taxable income to the recipient under § 71. Unlike many of the other provisions affecting individual income taxation under this tax reform act, the repeal of the alimony deduction does not expire in 2025. This means that spousal support, post-separation support or alimony. paid under a divorce instrument (court order or contract/agreement) signed on or before December 31, 2018, will continue to be tax-deductible if all of the § 71 requirements are met.

To take advantage of the tax deduction for alimony, supporting spouses need to schedule a court date before December 31, 2018 to finalize post-separation support and/or alimony. Individuals planning to marry will also need to finalize a contract such as a Prenuptial or Antenptial Agreement with their potential spouse. For separated spouses, a Separation Agreement or Reunification Agreement also needs to be finalized by December 31, 2018. If you are a supporting spouse, either court ordered to pay spousal support or contracted to provide such support, you would receive a tax incentive, or deduction, in the years in which spousal support is payable. Your accountant or tax professional can educate you on how to take advantage of such tax incentives for 2018 before they are repealed. A skilled, experienced family law attorney can provide relevant legal advice regarding the obligation to pay or entitlement to spousal support and how taxes can affect your bargaining power or legal arguments to a Court. Contact a board certified specialist in family law today!

Adoption Credits and Taxes in 2018

The Tax and Job Cuts Act of 2017 threatened adoption credits for families adopting after January 1, 2018. The good news is the non-refundable baseline adoption credit is still valid for 2018 and has increased to $13,840. A tax professional can advise you on the income restrictions, if you have adopted within the last five years and other specific information related to your situation. Only a skilled attorney with experience in Adoption law can assist you in finalizing the legal status for a potentially adoptive minor child. Ashley Michael has over 10 years of experience in all types of adoptions such as stepparent adoptions, relative adoptions, ICWA adoptions (Indian child), interstate adoptions (ICPC), same-sex marriage adoptions, adult adoptions, foreign adoptions or readoptions, and contested litigation.

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