With the close of the year quickly approaching, residents in Texas and elsewhere are concerned how ending a marriage may affect them. This is not only focused on the holidays occurring in the winter months, but also tax implications that may hit them this coming tax year. Divorcing is never easy. However, it is important to understand where it is more beneficial to reach a divorce settlement before or after the end of the year.
It comes as no surprise that the divorce process is expensive. In fact, few households are able to live off of less than half of their income, which means splitting it in two is almost the result in every marriage, no matter their lifestyle or income. But, based on recent reports, for families with a primary breadwinner, divorce is about to get even more expensive for them.
Traditionally, alimony, which is also referred to as spousal support, has been tax deductible for those paying this support and taxable for those receiving this form of financial support. From this perspective, these tax implications resulted in less money for the government and more money to split among the two divorced spouses.
So, if a divorcing couple seeks to avoid the elimination of tax deductions for alimony, they must focus on reaching a settlement by December 31, 2018. In order to accomplish this, one must focus on three things. First, spouses should decide what they really want. In other words, the must haves in the divorce settlement.
Next, a plan should be devised. This allows each spouse to have full financial understanding of the agreement.
Finally, a souse should understand if it is more lucrative for them to settle now. If an agreement cannot be made, it should not be rushed.
So many thoughts and decisions go into filing for divorce. As such, the divorce process requires the same. Because of this, it is imperative to become well informed. This ensures that a fair and agreeable divorce decree is reached.