“How Do The New Tax Law Changes Affect Spousal and Child Support?”
The new tax reform has made several changes which affect child and spousal support, including one prospective change that is scheduled for 2019.
The main change is the with the new tax tables, income for most W2 wage earners has gone up a little bit. This means that guideline calculation for child support and temporary spousal support will be slightly higher than in previous years.
The second change is that the rules for tax rates for Qualified Business Income for certain self-employed individuals and small businesses allow a major reduction of tax rate for certain income ranges. This increases actual income and can increase spousal support, depending on how the taxes are filed. For people who qualify for the QBI deduction, it is very important to have a forensic accountant to determine actual income and the best way to file, or the calculation for support may be inaccurate. Having an actual CPA doing the taxes is also a must, as business income is much more complicated than under the previous rules where you simply maximized deductions.
The prospective change is that currently Spousal Support, which is normally tax deductible to the payor and taxable income to the payee, would no longer be tax deductible by the payor. This is a major change, and is scheduled to begin in 2019. However, you should be aware that some experts on tax law predict that this will either be canceled or pushed back another year. If paying spousal support may be in your future, stay tuned for that change. As currently set, all spousal support orders made before January 1, 2019, would be grandfathered in and would be tax deductible. However, these rules are not yet set in stone and there very well may be additional changes before anything happens.
DISCLAIMER: All legal principles quoted are valid as of the date of writing in the State of California. However, you should NEVER base your actions on a legal article, blog, or internet story, as facts in real life are complicated. You should have your case evaluated by an attorney experienced in the area of law needed for your case. In addition, there are often exceptions and potential changes to results that occur due to facts that you may think are trivial or unimportant. This article should not be taken in any way as legal advice on your specific legal matter.
NOTICE: This blog and all materials on our website constitute advertisement materials, and the promulgation of such materials is meant for the residents of the State of California only. The attorneys and this firm do not practice law in any other state. In addition, the promulgation of these articles does not in any way create an attorney-client relationship and any inquiries and information you may send to the attorneys should be general and not specific, as they are not confidential.
“How Do The New Tax Law Changes Affect Spousal and Child Support?”
The new tax reform has made several changes which affect child and spousal support, including one prospective change that is scheduled for 2019.
The main change is the with the new tax tables, income for most W2 wage earners has gone up a little bit. This means that guideline calculation for child support and temporary spousal support will be slightly higher than in previous years.
The second change is that the rules for tax rates for Qualified Business Income for certain self-employed individuals and small businesses allow a major reduction of tax rate for certain income ranges. This increases actual income and can increase spousal support, depending on how the taxes are filed. For people who qualify for the QBI deduction, it is very important to have a forensic accountant to determine actual income and the best way to file, or the calculation for support may be inaccurate. Having an actual CPA doing the taxes is also a must, as business income is much more complicated than under the previous rules where you simply maximized deductions.
The prospective change is that currently Spousal Support, which is normally tax deductible to the payor and taxable income to the payee, would no longer be tax deductible by the payor. This is a major change, and is scheduled to begin in 2019. However, you should be aware that some experts on tax law predict that this will either be canceled or pushed back another year. If paying spousal support may be in your future, stay tuned for that change. As currently set, all spousal support orders made before January 1, 2019, would be grandfathered in and would be tax deductible. However, these rules are not yet set in stone and there very well may be additional changes before anything happens.
DISCLAIMER: All legal principles quoted are valid as of the date of writing in the State of California. However, you should NEVER base your actions on a legal article, blog, or internet story, as facts in real life are complicated. You should have your case evaluated by an attorney experienced in the area of law needed for your case. In addition, there are often exceptions and potential changes to results that occur due to facts that you may think are trivial or unimportant. This article should not be taken in any way as legal advice on your specific legal matter.
NOTICE: This blog and all materials on our website constitute advertisement materials, and the promulgation of such materials is meant for the residents of the State of California only. The attorneys and this firm do not practice law in any other state. In addition, the promulgation of these articles does not in any way create an attorney-client relationship and any inquiries and information you may send to the attorneys should be general and not specific, as they are not confidential.
“How Do The New Tax Law Changes Affect Spousal and Child Support?”
The new tax reform has made several changes which affect child and spousal support, including one prospective change that is scheduled for 2019.
The main change is the with the new tax tables, income for most W2 wage earners has gone up a little bit. This means that guideline calculation for child support and temporary spousal support will be slightly higher than in previous years.
The second change is that the rules for tax rates for Qualified Business Income for certain self-employed individuals and small businesses allow a major reduction of tax rate for certain income ranges. This increases actual income and can increase spousal support, depending on how the taxes are filed. For people who qualify for the QBI deduction, it is very important to have a forensic accountant to determine actual income and the best way to file, or the calculation for support may be inaccurate. Having an actual CPA doing the taxes is also a must, as business income is much more complicated than under the previous rules where you simply maximized deductions.
The prospective change is that currently Spousal Support, which is normally tax deductible to the payor and taxable income to the payee, would no longer be tax deductible by the payor. This is a major change, and is scheduled to begin in 2019. However, you should be aware that some experts on tax law predict that this will either be canceled or pushed back another year. If paying spousal support may be in your future, stay tuned for that change. As currently set, all spousal support orders made before January 1, 2019, would be grandfathered in and would be tax deductible. However, these rules are not yet set in stone and there very well may be additional changes before anything happens.
DISCLAIMER: All legal principles quoted are valid as of the date of writing in the State of California. However, you should NEVER base your actions on a legal article, blog, or internet story, as facts in real life are complicated. You should have your case evaluated by an attorney experienced in the area of law needed for your case. In addition, there are often exceptions and potential changes to results that occur due to facts that you may think are trivial or unimportant. This article should not be taken in any way as legal advice on your specific legal matter.
NOTICE: This blog and all materials on our website constitute advertisement materials, and the promulgation of such materials is meant for the residents of the State of California only. The attorneys and this firm do not practice law in any other state. In addition, the promulgation of these articles does not in any way create an attorney-client relationship and any inquiries and information you may send to the attorneys should be general and not specific, as they are not confidential.