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Posted on in Spousal Support

Texas divorce lawyerLate last year, Congress passed the Tax Cuts and Jobs Act, which made significant changes to the deductibility of alimony payments. The recent amendments could have a serious impact on Texas couples who finalize their divorces next year, so if you are considering filing for divorce, it is critical to contact an experienced high asset divorce attorney who can explain the legal ramifications that the new law could have on your own divorce.

Alimony Basics

Except in specific circumstances, the amount of alimony that a former spouse can receive in Texas is capped at:

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alimony deductions, alimony payment reduction, alimony payments, complex divorces, complex property litigation, IRS rules, Williamson County complex divorce attorneyAlimony payments are part of the final settlement in many complex divorces. A recent study by the IRS has uncovered major discrepancies between alimony deductions and alimony payments on 2010 federal tax returns.

According to IRS rules, alimony that is paid to someone under a high asset legal separation or divorce agreement can be used as a deduction from a person's income for purposes of paying federal taxes. Conversely, a person receiving alimony payments under a legal separation or divorce agreement is required to report that money as income on their federal tax return.

However, a study completed by the Treasury Inspector General for Tax Administration (TIGTA) of tax returns from 2010 revealed a $2.3 billion tax gap between alimony deductions taken and alimony payments reported. There was a total of $10 billion dollars claimed as alimony payment deductions by 567,887 people in 2010. But 47 percent of those deductions had no corresponding alimony payment reported. TIGTA reported that part of the problem comes from the IRS not requiring a valid taxpayer identification number (TIN) when claiming alimony deductions.

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