TYSONS CORNER, Va. — Most of us are thinking joyful thoughts as we get close to the holidays. But here’s some cheerful news: If you’re thinking divorce, you better get moving.
“It’s stressful. It really is,” said a Montgomery County mom we’ll call “Mary.”
She’s among those stressing the big alimony change for the holidays. She’s worried if she doesn’t get her divorce agreement settled before New Years, she’ll end up with a lot less from her lawyer ex-husband.
“One hundred percent. That is why we are pushing to get this done,” she said.
Last year’s GOP tax bill shifted the tax burden for alimony. Now, the people paying alimony also have to pay the taxes on the money — and the people getting it don’t.
That may sound great for the lower income parent at first. Trouble is, the ex-spouse paying up may want to pay much less.
“Oh, it’s huge difference,” said Mary. “Without that money…My son is with me most of the time, so it’s something I really need.”
“Life is busy right now…We’re just scrambling,” said divorce lawyer Alan Plevy.
He is racing to wrap up a half dozen agreements before December 31.
“It’s critical to get this done now because the tax law changes on January 1. After then, you’re not grandfathered in.”
Get it done before New Years, and the higher income spouse will get to write off alimony on their taxes for as long as they keep paying it.
For a lot of people, that’s about a 30 percent discount on the payments.
“Because you’d get a deduction off your taxes and that would be fine, maybe you’d give the recipient more money, and we were able to settle cases,” said Plevy.
A stressful holiday season made perhaps even more stressful by a divorce deadline…and the tax man.
Judges in Fairfax and Loudoun Counties are so slammed by all the people looking to finalize their divorces, they’ve moved up the deadline — to Friday, Dec. 14th.
So why did Congress change the law? People who pay alimony are usually in a higher tax bracket — so the change over the next decade will bring in almost $7 billion extra for Uncle Sam.
