How Will Divorce Affect My Taxes in Wisconsin?
Tax reform is an important topic in the news currently, in part due to the fact that the recent Tax Cuts and Jobs Act have a significant impact on what happens to people’s taxes when they are getting a divorce in Wisconsin.
Common Wisconsin Tax Deductions and Exemptions
Most people are aware that when you get a divorce, you’ll need to divide your debt and marital property, but many people aren’t aware of what the implications are for divorcing when you file your taxes. For example, when you sell your marital residence or have a qualified domestic relations order (QDRO) that divides a pension, there may be significant tax implications.
Additionally, there are some exemptions you may be able to take in your divorce, including dependent child exemptions. You’ll also need to know whether you’ll be filing one final joint return or proceeding with a separate filing.
The Tax Cuts and Jobs Act
When the Tax Cuts and Jobs Act took effect, the way divorcees filed taxes changed. Prior to December 31, 2018, people who were already divorced could get a tax deduction for any spousal support paid, and those receiving support were ordered to continue reporting the spousal maintenance they received as taxable income.
However, those who divorce after this date will file differently. For individuals who are required to pay spousal support, you are no longer able to take a tax deduction for your payments, and those who receive alimony will no longer be required to report their support as taxable income.
Meet with a Wisconsin Divorce Lawyer
When you have concerns over how your taxes will be impacted by your impending divorce, contact one of our highly qualified divorce attorneys at Karp & Iancu. To schedule your free, no-obligation consultation, just submit an online contact form or give our office a call.