Tax tips for going through a divorce

Married couples who are separating in Alaska should be aware that tax laws regarding alimony will change for divorce agreements that are completed after the end of 2018. Starting on Jan. 1, 2019, alimony will no longer be tax-deductible for payers or tax-payable for recipients. Experts say that this is likely to mean less money for both parties.

Some couples are dealing with this by trying to finalize divorce agreements before the end of the year. Those who are taking this route should know exactly what they and their spouse will need in the property division process. While the agreement can be drawn up quickly, it is also possible to modify it later if either person decides they are unhappy.

However, people should not rush into an agreement that they do not fully understand. In some cases, it might be better financially to take more time and sign a good agreement. There are also ways of dividing property that could help offset the loss of some of the tax benefits. One way to do this would be for the alimony-paying spouse to keep taxable assets with a high basis, such as stocks and cash, and give the lower-earning spouse the tax-deferred assets such as IRAs.

It is often men who must pay spousal support following a divorce. Married men who are considering a separation might want to contact a family law attorney. A lawyer may be able to assist in working out a strategy for dealing with taxes and alimony as well as other possible issues, such as what to do about business ownership or what kind of child support payments to expect.

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