One thing Dayton, Ohio, residents, as well as members of the military and their families who are staying in the area, need to be aware of is that divorce, and other forms of legal separation for that matter, can affect one's tax situation in many ways.
For instance, under current rules, the payment spousal support, which is also commonly referred to as alimony, qualifies the person making the payment for a federal income tax deduction. The person receiving these payments, on the other hand, must report them as income.
This rule has been in effect for decades, and people going through a divorce often make decisions about how to handle spousal support based in part on this rule's existence
Ohio residents should therefore be aware that how alimony will get treated for federal income tax purpose will change profoundly at the beginning of the new year. Those who finalize their spousal support orders on or before December 31 will get the benefit, or the burden, as the case may be, of the current tax rules.
However, starting with orders finalized on January 1, alimony payment will no longer qualify for a tax deduction to the payor, nor will they mean that the person receiving these payments will have to report them on his or her income tax returns.
One of the most important things our law office does is advise clients of the potential tax consequences of a divorce, as there are many about which one must be aware. In this case, how to handle this change will depend on a number of circumstances that we can help evaluate. For instance, we can gauge how much one could save in taxes by getting a case resolved now as opposed to later.