Talk of The Villages Florida - Rentals, Entertainment & More
Talk of The Villages Florida - Rentals, Entertainment & More
#1
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Alimony taxable now
the person who pays has to pay the tax now too....
Does anyone know of any effort to change this back? |
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#2
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stand corrected.
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Identifying as Mr. Helpful Last edited by dewilson58; 10-24-2021 at 03:13 PM. |
#3
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Not true. The Tax Cuts and Jobs Act (TCJA), that went into effect in December 2017, changed the rules. Before that law, the payee of alimony could claim a tax deduction, and the receiver had the claim the alimony as income. The new law takes away the deduction from the payer and allows the receiver to receive the payments tax free.
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#4
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Quote:
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Identifying as Mr. Helpful |
#5
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Although I'm not affected, the assertion made me go look it up. Here's what I found.
It's Tax Season: Will My Alimony Be Tax Deductible in 2021? |
#6
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Quote:
Consider Mr and Mrs Jones who when married had an income of 100,000 dollars all earned by Mr Jones, and paid the usual income taxes. Those last 15,000 earned were taxed at a higher rate than the first 15,000 earned, our progressive income tax system. While married of course Mr Jones's income was supporting Mrs Jones. He couldn't file separate returns for himself and his wife and assign 15,000 of his earned income to her return to be taxed at a lower rate. Mr and Mrs Jones divorce. Mr Jones still makes his 100,000 dollars but is ordered to pay 15,000 a year to his ex-wife. Under the old system he would report 100,000 but deduct 15K making his taxable income 85K, and Mrs Jones would report her 15K received as income. But that 15K was in the lowest bracket and barely taxed. Mr Jones's income is still supporting Mrs Jones but now a chunk of it is being taxed at a lower rate. If Mr and Mrs Jones had children and Mrs Jones is the custodial parent after the divorce she is also receiving child support. This is more money Mr Jones is ordered to give his ex-wife to provide for the children. Child support has never AFAIK been deductible by Mr Jones. His income is taking care of his children as it was before the divorce. The 2017 law made alimony work as child support had always worked and this change slightly increased the amount of federal income taxes collected which was used to offset the tax reductions given businesses and individuals in the law.
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Men plug the dikes of their most needed beliefs with whatever mud they can find. - Clifford Geertz |
#7
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It may be semantics, but, Mr. Jones is now paying tax on $100,000 instead of $85,000. So, I am sure that he feels like he is paying tax on the alimony payments.
One of the inequities about alimony is that Ms. Jones can move in with a guy who makes $500,000, and still receive the alimony, as long as she doesn't get married. |
#8
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#9
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The practical effect of this is to reduce the amount of alimony awarded to spouses.
When judges look at the person paying the alimony that person can't afford to pay as much since alimony is no longer tax deductable. |
#10
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Ms. Jones is a golddigger. She won't let him throw her out.
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#11
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#12
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I agree, especially since he can't divert that money to an investment that could minimize his taxes on it. He must pay his maximum marginal tax rate on it and send the money to his ex-spouse. Not fair.
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#13
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i think it's on the bbb list.
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#14
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Has Beretta used to say, if you can't afford to do the time, don't do the crime. Even back in the 90s I had worked with an office staff of six woman all aged from the twenties to the 50s, just living with men and not being married as they all realized it was a pain in the ass to go through a divorce if they decide to kick the guy out, and they all worked for livings themselves. Yes I feel for women grow up in the 50s and '60s being told to stay home and not earn their own living and I understand the reasons for alimony. But I also don't understand many especially even if their wife's cheating on them not wanting to support someone that you obviously loved at one time.
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#15
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Dang, well I’m never gonna get married again. Wait😩 I said that last time 😭
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Closed Thread |
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