Will Finalizing Your Divorce in December Help or Harm You?
A December divorce involves important factors you should consider. Depending on your situation, there are pros and cons for finalizing your divorce in December. In 2019, new laws are going into effect. The laws significantly change alimony deductions and privately owned business valuation. Also, filing jointly or separately is a major consideration for some couples.
Joint or Single Tax Return Filing: Which Is Better?
If you and your spouse both bring home comparable income, joint filing may not make much difference. However, if one spouse makes considerably more than the other, that spouse would probably benefit from the joint filing deduction. Your marital status on December 31st determines whether you can still file jointly. If the tax difference is significant, you may not want to postpone divorce until after December 31st.
How Has Alimony Changed?
An article in The New York Times points out the difference in alimony for 2019. The new federal tax law no longer allows alimony as a deduction for the paying spouse. During the 1940s, the alimony deduction was to help couples make the transition from married to single taxpayers. Under the new tax law, the spouse paying alimony will have to pay tax on the full amount of alimony. The spouse receiving alimony will not have to pay any tax on the alimony received.
How Will Changes in Business Valuation Affect Division of Assets?
Another difference is the increase of cash flow for particular pass-through business entities. With owners paying taxes on earnings, some business values have increased. A privately owned business is an asset during property division. Business valuation in 2018 may be higher than in 2019.
Minimizing Stress for Your Children Over the Holidays
Some couples decide to stay together over the holidays to make it a happy time for their children. This may be a good plan for spouses who can get along and put their differences aside. However, if couples can’t overcome their differences, the holidays can be stressful. A volatile relationship riddled with physical or verbal abuse can make the holidays a traumatic time for children.
Do You Have Questions About December Divorce?
It is wise to weigh all divorce factors from all the angles. At Richardson Brown we are glad to answer your questions and provide legal advice, tailored for your circumstances.