${site.data.firmName}${SEMFirmNameAlt}
To talk to an experienced family law attorney about your case,
please call our Fargo office at
701-297-2234
Menu Contact

Tax laws will change divorce

The new federal tax law passed late last year will have a major impact on spousal and child support. Addressing these divorce changes to long-standing tax laws will have a major impact on divorce negotiations and litigation as a result.

The new law takes away the traditional personal and dependent exemptions. Claiming a head of household status will become important because the new tax law raises the standard deduction from $6,350 in 2017 to $12,000 in 2018; $9,350 to $18,000 for head of household filers and from $12,700 for married filing jointly filers to $24,000.

A parent with this status may be also be eligible for a larger $2,000 child tax credit for each child. This includes a refundable $1,400 for taxpayers, which reduces income taxes. A tax payer must be unmarried, pay over 50 percent of household expenses and have a dependent who lived in the household over half of the time to claim head of household status. Only one parent can claim this status if the couple has one child.

The child tax credit and head of household status will likely become an important part of negotiations, because these increase the after-tax income of their recipients. However, the IRS must publish a regulation before the child tax credit and its advantages may be traded. Parents may agree that it may be traded once it is legally permitted and, in the meantime, divide the tax credit's economic benefit.

The new tax law will also impact a spousal agreement executed after January 1, 2019 because this support will not be deductible to the payer and taxable as income to its recipient spouse. This will eliminate the financial benefits to the family where a higher-income spouse and a lower-income recipient could reach an agreement that would allow more transfer of money to family members.

Even though recipients will pay lower taxes, the financial advantages to the payer of alimony are eliminated, which may reduce the amount of this support. This change will take effect on January 1 and will play a role in the timing of settlement negotiations taking place in 2018.

 

 

No Comments

Leave a comment
Comment Information
EMAIL US FOR A RESPONSE

Tell Us About Your Case

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Commandments of Family Law

  1. The only truth your children need to know is that you both love them unconditionally, and that this isn't their fault.
  2. Take the high road — everyone wins when you do what's best for your kids.
  3. Negotiate but don't capitulate — if you are being pushed toward something detrimental for your children, stand your ground.
  4. You can only control yourself and how you respond. Don't engage.
  5. Do set up rules and responsibilities. Kids feel better when routine is continued.
  6. You are still their parent — don't be afraid to be one.
  7. Disneyland is in California, not in your home. Don't set up unreasonable expectations.
  8. It is not their job to take care of you. Repeat that to them. Often.
  9. Yelling is for sports — not court. Good lawyers strongly advocate without being disrespectful to opposing parties.
  10. Fair is a place you go to get cheese curds. Aside from that, nothing in life is fair.

Our Location:

Melinda Weerts PLLC
2534 South University Drive Suite 2
Fargo, ND 58103

Fax: 701-271-0082
Fargo Law Office Map

Back to top