Monthly Archives: February 2018

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Feb 8, 2018

The New Tax Law, Alimony & Child Support

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The current structure tax structure for paying alimony Currently, the person who is making the alimony payment is allowed to deduct the payment from their income tax. The person who is receiving the alimony payments is responsible to pay income tax on the alimony payments received. Disappearing Money & The “Divorce Discount” Because the person making payments has the higher income, they are typically in the higher tax bracket. As a result, the tax responsibility is effectively moved into a lower tax bracket so the government receives less money than if the PAYER of the alimony was responsible for the tax liability. This concept is sometimes referred to as the “Divorce Discount” because the total tax liability of a married couple typically decreases if they get divorced. There is also a lot of money that disappears through the alimony payment process. In 2015, 361,000 people claimed an alimony tax deduction to the tune of $9.6 Billion. However, only 178,000 people report receiving alimony payments. That means almost half of alimony payments that are written off never end up showing up on any income tax return. The New Tax Law and The End of the Alimony Deduction The end of the alimony deduction essentially means that the spouse who pays out alimony will also be the person responsible for paying the income tax on the alimony as they can no longer deduct it. This will likely result in smaller alimony amounts but the spouse receiving alimony payments will no longer be […]

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Feb 8, 2018

Divorce, Asset Division and Pets

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When Couples Divorce, Who Gets the Pets? Maryland Family Law Courts and How They View Pets When two spouses divorce, they have to work out a plan to divide the assets that they own together as well as a financial plan for alimony or spousal support.  Parents of minor children have the additional responsibility of working out custody arrangements and a parenting plan.  A fairly new issue that family law courts are seeing in a growing number of family law cases is how divorcing couples deal with the custody of shared pets. Pets and Divorce:  Custody Arrangements or Asset Division? Asset division is based on equitable distribution between the two spouses.  Custody of minor children is based on the best interest of the child.  Where pets had traditionally been seen by the courts as simply an asset, there have been a handful of recent cases where the best interest of the pet has been considered.  Ultimately, pets are considered personal property so Maryland family law will simply give custody of the pet to one spouse or the other.   However, as pets become a more and more contested issue in divorces, we may see the family law courts reconsider. The Best Interest of the Pet If one spouse was the owner of the pet BEFORE the marriage, they will almost certainly keep the pet after the divorce.  It also may be considered which spouse takes care of the pet most frequently; who is buying food and supplies and taking care of trips to the veterinarian?  Where the children will live […]

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