Just finished reading the morning paper about all the lobbying to change the new tax proposal. There was no talk about saving the deductibility of alimony.
I was unaware until the draft bill came out that eliminating the alimony deduction was being proposed. This will be catastrophic for families dependent on receiving alimony or unallocated support. The elimination of the tax deduction will result in billions of dollars of tax savings, the articles say. But those billions of dollars are coming from divided families who are struggling to manage to maintain two households on income that had previously been supporting only one. One might say, why should the tax code favor (mostly) men paying alimony. Divorce lawyers know that the tax break makes it possible for more support to go to the families and children. Statutes will have to be changed: The Massachusetts alimony reform law establishes a range of 30-35% alimony—but that is based upon the presumed tax deductibility of alimony. If it not tax deductible these percentages will need to be changed, but until then it will be up to Judges and lawyers to take tax consequences into account.–All of this results in more costs to the litigants and more work for judges. SAD!