UPDATED: Alimony will now be taxed under GOP bill
UPDATE: I am apparently wrong about alimony being taxed twice. The person PAYING the alimony will now bear the entire tax burden for that money and the receiver won’t be taxed on it at all. (Somehow this seems so unfair.
I wonder how future prenuptial agreements will be affected?
I’m going to leave this up because it would be dishonest to delete it., And there are other posts involved, including the one that pointed out my error and it would be wrong to delete them as well.
****BELOW IS MY ORIGINAL POST WITH THE MISTAKEN CLAIM ABOUT DOUBLE TAXATION:****
Now this is really going to hurt some people. And it is really unfair. And it’s taxing the same money twice.
And of course, it’s the low income rabble that it hurts the most.
Alimony will now be taxed under GOP bill
Breaking up is hard to do. But the GOP tax bill could make it even harder, divorce lawyers say.
The final version of the tax plan, which was released Friday and is set for votes next week, eliminates the tax deduction for alimony payments. Divorce lawyers say this move could make ending marriages an even more drawn-out and expensive process, and the change could be particularly painful for lower-income couples.
Alimony payments, typically codified in the terms of a divorce settlement, are separate from child support. They are the payments that someone gives to an ex-spouse who earns less money.
If the tax bill becomes law, the alimony deduction repeal would affect divorces carried out after December 31, 2018. The new rule wouldn't affect anyone already paying alimony.
https://www.msn.com/en-us/money/taxes/alimony-will-now-be-taxed-under-go...
If I said what I was thinking I’d be hearing the Secret Service pounding on my door by midnight. There will be a breaking point. There always is.
Comments
So, it looks like it will NOT be taxed twice.
Everything I read indicates that it will be taxed on the payor's income, but not the recipient's. Nonetheless, it will be taxed at a higher rate, since normally the person paying the alimony is in a higher bracket.
A long, long time ago I worked in a research group that had developed their own software for simulating different tax and transfer payments policies, and combining those with the extensive set of survey data called the Survey on Income Plan Participation that the Census Bureau collects (or collected, I wouldn't be surprised to find that in the modern GOP Sgt Schultz approach to government, that program has been killed), to evaluate who would really win or lose under each various schemes. I would love to have access to that stuff right now.
A cursory examination of some of the tax plan changes suggests that people who really take it on the chin are going to be folks maybe in the 80th-99th percentiles. For example, they're supposedly "almost doubling" the standard deductions. If true, that's a windfall for the 70% of folks who don't itemize anyway, typically because they either rent, or they don't have a big enough mortgage or pay significant property taxes. Who will get fucked, for sure: All those San Francisco and Seattle and Portland liberals, with their inflated mortgages and their high-tax pro-society local governments -- because they're capping the property tax deduction. But then on the other hand, they're eliminating personal exemptions and that's a MASSIVE fuck-over for all but the wealthiest americans.
At any rate, one thing they definitely succeeded in doing was: They created a tax reform plan so complicated that nobody can really figure out who wins (other than the rich, of course) and who loses.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
Yes it will be taxed twice
All income by the payer of alimony is taxed. So that is the first tax. But it was an allowable deduction on the payers income taxes. So that eliminated (sort of) the tax on that end.
Alimony is taxed as INCOME to the ex-spouse. Spousal support is always taxed.
So eliminating the alimony deduction will see both the payer and payee paying income tax on the same money. So yes, it will be taxed TWICE.
I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks
Politics is the entertainment branch of industry. - Frank Zappa
again -- in all analysis i found, the analyst indicated that
the new bill makes the alimony non-taxable to the recipient, but taxable to the payor instead. thus, it would be treated pretty much the same way that child-support is treated now.
i haven't seen the text myself, so i can't swear that it's true -- it's just what "everybody" seems to be saying. however, given the relatively small amount of money this change is supposed to make to the overall numbers, it seems likely to be right. i don't know. if not, it's an extraordinary additional tax burden on a rather specific group of people -- those paying alimony.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
Well we’ll see. Because I paid income tax on my ‘alimony’ for
The short (very short) period that I collected it. If this new bill kills that requirement, that would be great, although I think it’s sort of unfair. I understood why I was taxed on my alimony. It WAS income. And my ex getting a tax deduction also seemed fair. He was chipping in money that went to ‘support’ me.
I’ll research this some more. Because I’ve been known to be wrong before.
I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks
Politics is the entertainment branch of industry. - Frank Zappa
nobody seems able to even come up with a reasonable
explanation for why they want to do this, because the net gain to the government will be quite small, but the extra tax burden on the individuals could be significant. couples getting divorced are often already in a financial crisis, and this tax law change only worsens that by draining resources they need to keep both households afloat after the divorce.
note BTW, it will only apply to new divorces. which makes a bit of sense, since previous alimony payments were negotiated under a different set of assumptions, but it also means that it will be years before it's a blip on the revenue screen.
The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.
Insatiable greed n/t
There is no justice. There can be no peace.
But Butt-Head Trump is saying
That this Tax Cut Bill will be Terrific. And everyone will benefit but the two biggest beneficiaries will be "Jobs" and the Middle Class.
GOPers haven't even passed this Rape Of The Middle Class bill yet, and they are already talking about moving on to gut entitlements. YOu know entitlements -- aka Medicare, Social Security. Gotta pay for this tax windfall for the morbidly rich.
PS. With 50% of marriages ending in divorce, this divorce tax is gonna hit a ton of people.
Donnie The #ShitHole Douchebag. Fake Friend to the Working Class. Real Asshole.
Just think about the poor schmoos who
have bern married multiple times.
Ouch!
I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks
Politics is the entertainment branch of industry. - Frank Zappa
Heads up! Dems are threatening to allow 'Medicare Cuts'--
to protest elimination of the ACA mandate.
Hope folks will burn up the lines to their Dem lawmakers!
Per Susan Collins, a 'waiver' has been voted on/passed more than 16 times to avoid such a cut, since the (Dem Party majority) passage of the Pay-Go Rule in 2010, which is responsible for this automatic Medicare cut.
Now, I 'think' that Repubs might be able to get around this, if they attach a waiver to a bill that would require Dems to vote 'aye,' or shut down the government. From all that I've read, Schumer is not likely to be willing to go there.
Still looking for a good PDF copy of a 'detailed' outline of the final tax bill (since I'm too lazy to read the entire bill). If I find one, I'll post it here.
Mollie
"Being deeply loved by someone gives you strength, while loving someone deeply gives you courage."--Lao Tzu
Everyone thinks they have the best dog, and none of them are wrong.
@#
@#
Edit: not sure how I cut off the identifiers, Unabashed Liberal, or wound up with an extra @# once it posted??? That doesn't show in edit, either... I haz mysterious skillz...
What, Americans aren't dying fast enough to suit them? And how are the Dems going to make Medicare recipients believe that cutting their Medicare is threatening anyone but them? Did the Dems poll the Republicans as well as their funders this time, instead of their usual poll groups?
On the other hand, if simply repeating the Big Lie has worked even to the point of gaining public support for Mutual Assured Destruction of life on the planet - time to short out corporate media broadcasting stations? (Sorta snark...)
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.