Alimony Tax Deductions to be Eliminated in 2019

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There is huge change coming to how alimony is going to be treated from a tax standpoint. Over the past 75 years, one factor remained the same: alimony was deductible for paying spouses, while receiving spouses were expected to pay income tax on any alimony received.

Effective January 1, 2019 alimony tax deduction will no longer exist! From a family law perspective, I anticipate clients who may be ordered to pay alimony to their spouse will need to take immediate action in order to receive a tax deduction on their alimony payments for years to come. Unfortunately, for those who do not take the necessary steps to file their case or move their existing case forward quickly, they risk not getting to Final Hearing prior to the elimination of alimony tax deduction.

In other words, being proactive is of the upmost importance for paying spouses. According to financial experts, under the Tax Cuts and Jobs Act, in all divorces after December 31, 2018, not only will alimony no longer be deductible for the payer, but no taxes will be due from the recipient. So recipients may want to delay until after January 1, 2019 and alimony paying spouses will want to get their cases to Court for final resolution prior to January 1, 2019.

For all Final Judgments entered after 2018, higher income spouses and those subject to higher tax brackets will lose up to 37% tax deduction on future alimony payments.  As a Family Law attorney serving Orlando and other neighboring counties in Central Florida , it is my responsibility to educate my clients on how this could impact their dissolution of marriage case. Speaking from past experience, tax deductions on alimony payments have become a financial cushion for the paying spouse.

The problem is that it can take several months to get to a Final Hearing on your case and because so many alimony paying spouses will need to get a Final Judgment prior to the end of the year, there will  be a flood of new filings or cases already filed that will be pushing to Final Hearing before the end of the year.  This will create an even bigger back log in the Court system which could take even longer to get your case heard by the Judge. And of course the Judge may need time to consider the evidence at Trial and may take additional weeks to render the decision.

Although the loss of alimony tax deductibility presents paying spouses with significant challenges, our experienced Family Law attorneys at The Marks Law Firm, P.A. are keeping up to date with these alimony developments. The one thing I would say is if you may have to pay alimony, “Do not wait.”

To speak with one of our Family Law attorneys regarding your alimony concerns in Orlando and other neighboring counties in Central Florida, call our office and schedule a consultation today.

How Much Alimony Can I Receive From My Divorce?

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Alimony is one of the most hotly contested issues in a divorce.

Some cases can carry on for years because spouses cannot agree on alimony.

Under Florida Statute 61.08, the amount of Alimony you can receive from your divorce depends on several factors starting with:

  1. Need: First, the court must determine whether or not you or your spouse needs spousal support (aka – alimony).
  2. Ability: Second, the court must determine whether or not you or your spouse has the actual ability to pay spousal support.

Once the court has found need for alimony by one spouse and an ability to by that alimony in the other spouse, then the court must consider all relevant factors to determine exactly how much alimony should be paid.

Generally, the court considers approximately ten key factors in assessing how much alimony should be paid from one spouse to the other, which are listed in Florida’s alimony statute 61.08.

Most Common Types of Alimony Received in Florida Divorces

There are also five different types of alimony which will impact the total amount of alimony you may receive.

The five types of alimony include:

  1. Permanent Periodic: This is alimony paid to a spouse until that spouse remarries, or until the paying spouse dies. This type of alimony is usually only available in cases of long-term marriage.

 

  1. Durational: This is alimony paid to a spouse for a short or moderate period of time. As such, this is the type of alimony awarded to spouses of short-term or moderate-term marriages. The only limitation to durational alimony is that you cannot receive durational alimony for a period of time longer than your marriage itself.

 

  1. Bridge-the-Gap: This is alimony paid to a spouse to help them “bridge-the-gap” between married and single living. Usually, this type of alimony is only paid for a short period of time.

 

  1. Lump Sum: This is alimony paid to a spouse in installments. Sometimes spouses agree to make a one-time lump sum payment of alimony, other times spouses choose to make installment payments over a specific period of time. In either case, lump sum alimony cannot be modified at any time.

 

  1. Rehabilitative: This is alimony paid to a spouse for the purposes of helping the receiving spouse become self-sufficient by developing new skills, obtaining an education, or work experience. The receiving spouse must demonstrate a plan for becoming self-sufficient, and this type of alimony is generally short in duration.

As you can see, the length of your marriage also impacts how much alimony you’re eligible to receive. Usually, the longer you’re married, the longer you are entitled to receive alimony. Florida statue 61.08 outlines what constitutes a short-term vs. moderate-term vs. long-term marriage.

You Can Agree to Any Type of Alimony

You can also negotiate alimony beyond, or different from the statutory guidelines if you and your spouse agree to different terms through a settlement conference or divorce mediation.

In Central Florida, you may also request Temporary alimony immediately after attending mediation if you and your spouse fail to come to an agreement. Temporary alimony allows you to obtain court ordered spousal support while your divorce is in progress, and you’re waiting for a final determination on your alimony issue.

Remember, obtaining alimony in divorce is not automatic. You must ask for alimony in your divorce petition or divorce counter-petition to be awarded alimony by the court. Failure to ask for alimony could result in you waiving any ability to get alimony after your divorce is finalized.

Alimony involves several complicated tax, income, and even child support issues, so it’s important to discuss your options with an experienced divorce attorney who can provide you with guidance in this area.

To learn more about how much alimony you may receive in your Orlando divorce case click here to request a consultation or call 407-872-3161 to speak with someone from our team today.

Will I have to pay Alimony if I get Divorced in Florida?

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One of the more common questions we receive from clients is:

“Will I have to pay alimony if I get divorced?”

Unfortunately, that question is not easily answered. Having to pay alimony in Florida depends on several factors unique to your personal divorce case.

To help you understand how alimony works in most Florida divorce cases, let’s cover some basic alimony principles you should know.

What is Alimony?

Alimony, also known as spousal support, is financial support ordered by the court and paid to your spouse.

For a spouse to receive alimony they must be able to demonstrate that they have a need for financial support and that the other spouse can pay them.

It is important to note that a spouse who wants alimony must request alimony in their divorce petition or divorce counter-petition. If they fail to ask the court to order alimony in their petition, it cannot be granted by a Judge at all.

In other words, if your spouse does not ask for alimony they cannot automatically get it.

Finding a “Need For” and an “Ability to Pay”

Florida Statute 61.08 subsection (2) says:

“In determining whether to award alimony or maintenance, the court shall first make a specific factual determination as to whether either party has an actual need for alimony or maintenance and whether either party has the ability to pay alimony or maintenance.”

This means the Judge will have to find evidence that supports the requesting spouse’s claim that they have a need for financial support. It also means the Judge will have to find evidence that supports the paying spouse can afford to make alimony payments.

Usually, your income is the first guideline used in this determination. If you make substantially more than your spouse, or if your spouse is a homemaker or otherwise unemployed, a court could determine that the difference in income between you and your spouse calls for some form of spousal support for the spouse in need.

Once a court has determined that the spouse requesting alimony has proven that they need alimony, and that the paying spouse has the money to provide the support requested, the Judge then has to determine the proper type and amount of alimony to order.

How Much Alimony Will I Have to Pay

To determine the proper type and amount of alimony to order, Florida Statute 61.08, outlines ten factors the Judge must consider.

Some of these factors include:

  • The standard of living during the marriage
  • The length of the marriage
  • The age, physical, and emotional condition of each spouse
  • The financial resources of each spouse (including all income and assets)
  • The earning capacities, educational levels, and ability to obtain employment
  • The contribution of each spouse to the marriage, which include homemaking, child rearing, education and career building of the other spouse
  • The adultery of either spouse and the surrounding circumstances

There are several other factors in addition to those listed above, so it is important to speak with an experienced divorce attorney about your specific situation, so you understand how alimony impacts you personally.

Once the Judge determines the appropriate amount and type of alimony to award in your case, the Judge can then order you to pay that amount and type of alimony to your spouse.

The good news is that Florida’s Alimony Statute requires an award of alimony to one spouse does not leave the paying spouse with significantly less net income than the spouse receiving alimony (although there may be exceptions).

Ultimately, while it never feels fair, this is the court’s way of ensuring an award of alimony doesn’t financially cripple the paying spouse.

When Will I Start Paying Alimony

Unless your spouse has requested and been awarded temporary alimony. Your alimony payments should begin on a date as ordered by the Judge. Usually, this date is shortly after your divorce is finalized.

However, if your spouse has requested and is awarded temporary alimony before your divorce is final, you will need to begin payments as ordered by the Judge in your case.

To learn more about whether or not alimony applies to your Orlando divorce case click here to request a consultation or call 407-872-3161 to speak with someone from our team today.

How Do I Get Alimony During My Divorce?

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Florida Statute 61.071- Alimony Pendente Lite (aka Temporary Alimony); Suit Money

“In every proceeding for dissolution of the marriage, a party may claim alimony and suit money in the petition or by motion, and if the petition is well founded, the court shall allow a reasonable sum therefor. If a party in any proceeding for dissolution of marriage claims alimony or suit money in his or her answer or by motion, and the answer or motion is well founded, the court shall allow a reasonable sum therefor.”

Often times there is a great disparity in incomes between spouses.  This becomes even more apparent once a Petition for Dissolution is filed, and the spouse with the greater earnings, refuses to support the other spouse.  To assist the spouse with the lesser of the two incomes from becoming destitute, one spouse may be ordered to provide necessary support for the other spouse while dissolution proceedings are ongoing.

The criteria for ordering such alimony are the need of one spouse and the other’s spouses to pay. The obligation to support one’s spouse if able is imposed by law while the marriage is still in existence and not extinguishable by contract or conduct.  

Thus, while the parties can contract away post dissolution support by executing a prenuptial agreement, any agreement waiving temporary support prior to the entry of the Final Judgment is void.  The procedural requisites for temporary support orders are not as demanding as a permanent alimony order would necessitate. This is due to the fact the one of the spouses may need immediate support prior to the completion of mandatory disclosure.

Health Issues, Medical Care, Health Insurance and Divorce

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As the pink ribbons blanketing Central Florida reflect, October is Breast Cancer Awareness Month! Like most of you, The Marks Law Firm has been touched by the destructive impact breast cancer can have, both on a family’s personal relationship and its finances. That’s why we wanted to take this opportunity to remind our extended family (you guys!) that Florida’s Statutes governing family law are aware of, and make provision for, the costs that accompany breast cancer and other medical struggles you might face.

Unfortunately, the development of significant medical issues can leave a family or individual in financial straits. Medical issues normally arise unexpectedly, putting an unplanned strain on finances that can be difficult to overcome. If you are a spouse preparing for a divorce, or a former spouse who faces growing medical bills, you are not alone.

Florida Statute 61.08, governing the determination of alimony in a divorce case, specifically takes into account the physical and emotional well-being (or health) of each spouse. And if you’re already divorced, the onset of sudden and unexpected health issues (and the bills that come with them) may constitute a substantial change in circumstances justifying an increase in the support you currently receive.
Similarly, the Florida Statutes also provide relief for spouses and former spouses struggling to care for a sick child.
There are few things that are harder on a parent than having to comfort and provide for a child struggling with health issues. When that happens, the last thing you want to worry about is the cost of the care your child needs. Florida Statute 61.30 addresses these concerns by discussing the cost of healthcare in the child support calculation. If you have a child battling illness, and the bills seem overwhelming, you may be able to obtain a much-needed increase in the child support you receive from the other parent.

No parent should have to make healthcare decisions for herself or her children based solely on the cost of the care involved. If you’re struggling with these costs and worried that your family may not be able to get the care it needs, call The Marks Law Firm to schedule a consultation and discuss your options.