If your divorce finalized on or before December 31, 2018, anyone paying alimony can claim spousal maintenance expenses to receive a tax deduction. Additionally, the recipient of the alimony will declare their payments as taxable income. However, new laws swept the nation affecting divorce judgments and modifications as of January 1, 2019. Here is how the new rules will affect you.

The Party Making Payments

If you finished signing the divorce settlement last year, the new tax laws do not pertain to you. Anyone just tying up the loose ends of their divorce or making modifications this year need to know that, going forward, any alimony paid is no longer tax-deductible.

How much you spend is also different with new calculation guidelines. Previously, maintenance payments were calculated by subtracting 20% of the recipient’s gross income from 30% of the gross income of the payor, capping out at 40% of the total combined gross income of both parties. One new change uses net income rather than the previous gross income standard. Today, a spousal maintenance payment is calculated by subtracting 25% of the recipient’s net income from 33.33% of the payor’s net income.

There are a multitude of things to think about when you are getting a divorce -- where the kids will live, which one of you will remain in the family home and how you will transition to single life. If you are like most people, taxes are not very high on your list of priorities. Even so, a divorce can have a big impact on your taxes -- especially in this coming new year. In January 2019, the new tax laws will finally be put into full effect and will mean some big changes for the way divorced couples handle their taxes.

Newly-Divorced Couples Will See an Impact on Their Taxes

The Tax Cuts and Jobs Act, which was passed in December 2017, will go into full effect in 2019. The new tax code will affect about half of all Americans. In the context of divorce, the new law will affect the taxes of those who pay and receive spousal support.

This new law will be the first change in 77 years to taxes affecting spousal support. Couples who finalized their divorce before December 31, 2018 will follow the current rules on who pays taxes on spousal support. Couples whose divorces are finalized on or after January 1, 2019 will follow the new set of rules on paying taxes on spousal support.

Traditionally, it was assumed that the man works to support his family financially while the woman, though she may have had a career before she was married, would quit her job to stay home and take care of the children and the home. Because of that, many women would be in a state of financial distress if they got divorced because they did not have any income of their own - which is where alimony came in.

In Illinois, alimony is called spousal support or spousal maintenance. These days, it is no unusual to see the man acting as the stay-at-home parent, or neither parent being a stay-at-home parent. Spousal maintenance is an important part of any divorce in which one spouse decided to sacrifice career for his or her family.

Determining Eligibility

Maintenance is not guaranteed to all divorcing couples. In some cases, the court will decide that maintenance is not appropriate or not needed. When making this determination, Illinois courts look factors such as the needs of each spouse, whether a spouse quit their career to tend to children or the home and the earning potential of each spouse.

Formerly referred to as alimony, spousal support is intended to provide a spouse with lower income or lower income potential with financial support after a divorce. Prior to awarding spousal support to a spouse, the court considers several factors including the age of each spouse, the couple’s standard of living during the marriage, the assets and income of each spouse, sacrifices a spouse made to support the other spouse’s career or education, and the present and future earning capacity of each spouse.

While most people understand the basics of spousal support, many wonder when it ends. Read on to find the answer to this question.

Events That May End Spousal Support

Divorce is difficult for all mothers. However, stay at home mothers going through a divorce face unique challenges as they are forced to figure out how to support themselves and their children financially without their ex-spouse’s income. If you are a stay at home mom going through a divorce, these tips can assist you in surviving on your own.

Create a Budget

To create a budget, start by compiling a list of all of the monthly expenses you will have once your divorce is finalized. By doing so, you’ll understand how much money you will need each month to support yourself and your children.