Making the decision to get divorced is not generally something people in Colorado do quickly. Working through the process of getting to a final divorce settlement is also not commonly a quick or hurried thing. However, an imminent change to the United States Tax Code might actually be changing that for the near future.
According to Bloomberg, there may well be a significant rush to complete a divorce in 2018 seen not only in Colorado but across the nation. This rush is fueled by a major shift in how spousal support payments will be taxed starting with the calendar change from December 2018 to January 2019.
For multiple decades, the person who received spousal support was the person who was responsible for paying income taxes on that money. The person who made spousal support payments enjoyed the ability to deduct the payments from their tax return. The tax liability for these funds will now be reversed and put on the shoulders of the person who makes the payments. While the goal of this change from the government's perspective may have been an increase in tax revenue, it may well have ripple effects on the divorce settlement process.
The ability to get a tax deduction in exchange for paying alimony was often used as a way to negotiate other terms toward a final agreement. With that off the table and the additional payment of taxes, finding a resolution that both spouses will agree to may well become more cumbersome and time consuming. Hence, couples who can complete their divorces in 2018 may well want to push to do so.