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New tax laws may lead to increase in divorce

There has been heated discussion in Iowa and elsewhere around the country about the nation's recently revised tax laws. There is much debate regarding whether the changes will have a positive impact on the economy. However, some experts anticipate that there will be an increase in the divorce rate through the end of 2018.

There has been a so-called "marriage penalty" in the country's tax laws for some time. Yet, the new laws seem to make that penalty greater. Currently, a couple where both spouses work is often thrust into a higher tax bracket when they get married. In the new tax bill, several deductions have been modified., limiting how much a married couple filing jointly can deduct.

Going forward, there will be a $10,000 limit on the amount someone can deduct for state and local taxes. This is significantly lower that the current amounts that can be deducted currently in several states. Also, the amount of mortgage interest that can be deducted is being reduced from $1 million to $750,000.

Changes to the way alimony is taxed will be effective Jan. 1, 2019. The payer of alimony will no longer be able to deduct the amount from taxes and the receiver will not have to pay taxes on the amount. Some matrimonial attorneys anticipate increased divorce filings in 2018 to avoid these changes.

Finances are typically one of the most contentious topics when going through an Iowa divorce. To ensure that one's best interests are addressed throughout the deliberations, it would be beneficial to contact a knowledgeable divorce attorney. An experienced lawyer will be a valuable partner in the quest to obtain the most favorable outcome in the proceedings.

Source: foxbusiness.com, "How Trump's tax code could lead to a rise in the divorce rate", Brittany De Lea, March 1, 2018

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