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Property division, more affected by tax changes

Jan 24, 2019 | Firm News, Property Division

The month of January usually sees higher rates of divorce than any other time of year. While this spike in filings is normal, the resulting divorce processes might not be. Recent changes to the tax law will affect how West Virginia couples handle things like property division, alimony and other issues.

Although the new tax law passed back in Dec. 2017, many of the rules have been rolled out slowly. The new rule regarding alimony went into effect on Jan. 1, 2019 and will probably significantly change people’s expectations of spousal support. In the past, the person paying spousal support could deduct the amount on their taxes, so there was an incentive to pay enough to possibly drop the person into a lower tax bracket. That deduction is now gone, meaning that not only did the incentive disappear but some people may not be able to afford hefty monthly payments.

Deductions for state and local income taxes — also called SALT — also changed. Now, people may only deduct up to $10,000 in SALT per person. This may disproportionately affect divorcees who hope to keep the marital home after divorce. If they can no longer count on larger tax deductions and are surviving on lower alimony payments, keeping the house could be out of reach.

It can be easy to get caught up in the idea that change is bad, but this is not always the case. Even if some of the unease surrounding these new tax rules are understandable, it should not prevent unhappy West Virginia couples from pursuing divorce. However, it might be a good idea to seek guidance on property division and other things that might be affected by the new rules.