Rushing into a divorce is not something most attorneys would advise. It is a significant decision, one that will affect one's life and one's children -- if applicable -- forever. That being said, Michigan residents who have been considering ending their marriages, could benefit from finalizing their divorces by the end of 2018. Changes to tax and divorce law are set to go into effect in Jan. 2019.
One change that is coming affects alimony. Under current laws, those individuals who pay alimony can deduct it from their taxable income, and those receiving it have to pay taxes on it. Under the new law, alimony will neither be deductible or taxable. This may sound good for the receiving spouse, but it could actually result in one being paid less than they would get under the current law.
Another change that is coming affects the marital home. Under new tax laws, if selling the marital home while married, there are no tax consequences for gains up to $500,000. If one spouse keeps the house after divorce and chooses to sell it on his or her own, this number drops in half. This can leave one owing a lot in taxes, so selling before a divorce is finalized is something to consider.
Other changes coming can affect who can claim children on taxes and the validity of certain aspects of pre- or post-nuptial agreements. All of these tax and divorce law changes can end up hurting one or both parties in the long run. Michigan residents who are considering divorce can turn to an experienced attorney for more information about how the new laws may affect them personally if they choose to put off their dissolution filings.