Taxes and divorce – neither of those things are fun. But did you know that the new tax bill may actually affect a divorce? There are three key changes that appear in the Tax Cut and Reform Bill which President Trump signed into law during December of last year. If you’re thinking of getting a divorce in the near future, you’ll want to review how this new law can impact the outcome. Here’s what you should know:

1. Alimony. The prior tax code says that alimony is tax deductible by the payor and taxable to the payee which means whoever is paying alimony (spousal support) is doing so with pre-tax dollars which they will be able to deduct. However, under the new tax bill, alimony will no longer be tax deductible and the spouse receiving the support does not need to claim it as income for divorces finalized in 2019 and after. The payor is traditionally the higher earner and taxed at a higher rate and the payee at a lower rate. Previously, there were less taxes to pay regarding alimony, but the new tax law results in more taxes and less money. Alimony has frequently been used as a tool in settlement to avoid a trial, but the new tax law may impact that. The good news is that if your divorce is finalized before January 1, 2019, the old tax rules still apply.
2. Dependents and Child Tax Credit. At the beginning of this year, dependency exemptions were eliminated. An exemption reduces your taxable income while a credit reduces tax liability. An exemption for a dependent (traditionally your child) is the income that you can exclude from your total taxable amount. The previous exclusion for each dependent was $4,050, however the new tax law makes that zero. The child tax credit offsets taxes you may owe per dollar and is available if you’re the parent of a child under 17 who lived with you at least half the year. The previous law allowed for as much as $1,000 per child while the new law allows for as much as $2,000 per child. However, you can only claim this tax credit if you claim the child as a dependent. When it comes to divorce, a non-custodial parent may only claim a child as a dependent if the custodial parent agrees and signs off on it.
3. Itemized deductions. There have also been some changes to tax code relating to divorcing parties that claim deductions and itemize tax returns each year. Those include:
   1. The ability to deduct interest on a mortgage has been reduced from $1 million to $750,000.
   2. You can no longer deduct legal fees directly related to spousal support.
   3. You can no longer deduct tax preparation fees. 
   4. Interest on home equity loans is no longer deductible.

Also new this year is an increase in standard deductions - $12,000 for single and $24,000 for joint filers). When it comes to divorcing parties, there are key itemized deductions that accompany property and debts and with new standard deductions, fewer people may opt to itemize.

​If you have questions about how the new tax law may affect your impending divorce, let Vener Family Law and Mediation help. Divorce and taxes are stressful enough. Let the professionals help guide you through

Divorce is stressful and can be mentally, physiologically, and emotionally draining. Practicing self-care during a divorce is just as important and keeping the ship of your daily life afloat. Stress can cause cracks and if those cracks aren’t address, your ship will sink. Taking time to take care of yourself isn’t selfish, it’s necessary during a stressful live event like divorce. Self-care also doesn’t have to be incredibly involved – just having a focus on your own needs can make all the difference. Here are some ways you can practice self-care during one of the most trying times in life.

1. Sleep. This may be easier said than done but getting enough sleep during stressful times in life is key. Keeping up your sleep routine will allow your body to stay strong and heal both physically and emotionally. Make your bedroom a sanctuary to aid in turning off thoughts at the end of the day. Put down the cell phone and focus on truly restful sleep.
2. Reflect. You can allow yourself to feel. Oftentimes when we’re going through stressful or emotionally traumatizing situations, we tend to shut off and push down our feelings so that we can continue to function. Dealing with those traumatic feelings is crucial to healing and letting go. Sit in your sadness, acknowledge it, and let it go. Reflecting on your feelings is an important part of self-care.
3. Socialize. The last thing you might want to do is be in public with the potential of having to face questions about the status of your marriage. However, meeting up with old friends for a little socializing will really help during this difficult time. Confide in those that have known you longest and have always been there for you. Now is their time to shine and help you get back to yourself.
4. Try something new. Now is the time to rediscover yourself as a single person. Trying something new is the perfect way to jumpstart that process. New experiences can rewire the brain and the time during and after a divorce can be an ideal time for that. Do something that you’ve never done – skydive, sign up for a dance class, anything that will get you out of your comfort zone. Who knows who you could meet during your new adventure!
5. Take care of your body. Self-care means taking care of your body just as well as your mind and soul. Be sure to eat well and move. If you had a fitness and food routine before your divorce, keep it up. If you didn’t, now’s the time to start one. Emotional stress can take a toll on the body, but if you’re being proactive about keeping it healthy, you’re ahead of the game.

We know how hard divorce is on everyone involved. If you’re in need of counsel, mediation, or have any questions about divorce proceedings, let Vener Family Law and Mediation help. With years of experience in this specialty, we know how to make the process as smooth as possible.