Starting in 2019, alimony will no longer be considered income to the person who receives it. Furthermore, it will no longer be a tax deduction for the ex-spouse who makes the payment. For Colorado couples who cannot get their divorces finalized in the final few days of 2018, there may be other ways to avoid the ramifications of the new tax rules.
One option may be to ask for a lump sum payment as part of the divorce settlement. This may be ideal for those who are looking to dissolve a marriage in a timely manner and without a lot of drama. It may also be possible to ask for property division payments instead of alimony payments. If such payments are not made, up to 25 percent of a payee’s wages can be garnished until the balance is current.
Property division payments compensate a person for a portion of an asset’s value. For instance, if a home was worth $100,000, an individual may receive half of that in the form of cash payments. These are generally made over time, and they could be postponed or eliminated in bankruptcy. This could be beneficial to those making payments as alimony generally cannot be discharged in a bankruptcy proceeding.
Anyone who is filing for divorce in Colorado may wish to have an attorney help with their case. A lawyer can provide an objective viewpoint in the matter, which may result in a timely settlement. In many cases, a timely settlement could be helpful from a financial standpoint. This can make it easier for exes to provide for themselves and their children after a marriage ends.