OWM Blog – New Tax Laws and Ways They May Affect You

tax lawyer in montgomery county

The Tax Cuts and Jobs Act (TCJA) is a huge and complicated revision of the federal tax law.  It will take some time and expertise to parse out exactly how it will affect each of us as individuals.  How Congress intends to “pay” for this law remains to be seen since a projected reduction in tax revenues of $1.5 trillion over the next 10 years will be added to the current deficit.  There is talk currently of “entitlement reform” or reducing/eliminating Medicare, Medicaid, and/or Social Security benefits.  Keep alert for more to come on these subjects, and contact a tax lawyer in Montgomery County with any questions.

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New Tax Law Eliminates Alimony Tax Deduction

A few things are certain when going through divorce, but the tax status of alimony payments was always a given.  Alimony, which is support provided by one ex-spouse to the other after a divorce has been entered, has historically been deductible to the payor and includable as income for the payee.  That is no longer permitted. On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act which took effect on January 1, 2018.  The new law eliminates the tax deduction for alimony payments.  As such, alimony payers will no longer be permitted to deduct alimony on their taxes.

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