If you are ordered to make alimony payments in your divorce settlement, you have been able to write those payments off on your taxes in years past. Previously, alimony payments were tax deductible under federal law. However, changes to this federal law have restricted this right for people in Florida and throughout the United States. In 2019, alimony payments are no longer tax deductible, and this change may have a significant effect on your taxes, your finances and your life.
Since you are now required to pay taxes on your alimony payments, you may notice a substantial increase on your federal and state taxes. This leaves less money for you to spend on other things necessary for your household. It may be more difficult to pay your mortgage, keep up on car payments and afford other life needs. Money may be tight, which could cause an extreme deficit to your funds, your lifestyle and your quality of life. If children are involved, you may have less money to make child support payments or support your children with other financial endeavors.
Some believe that because of this tax shift, the party receiving alimony payments will have more money while the party paying will fork over the money for taxes. Others say, however, that because of this increase in taxes on alimony payments, you may have less money to give to alimony, and the person receiving the payments will get less.
This information is intended to educate and should not be taken as legal advice.
