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Proposed tax legislation may impact California divorce process

Many people have concerns about ending their marriages due to the financial impacts it could have. If one person has become financially reliant on the other individual or needs income to maintain a current lifestyle, seeking alimony may be an important part of the divorce process. However, due to recently proposed tax legislation, California residents may have greater concerns regarding this type of support.

Recent reports stated that the legislation could have a considerable impact on alimony. The tax plan as proposed by House Republicans hopes to see obligations for paying taxes on spousal support swapped from the receiving party to the paying party. This means that individuals who make support payment would have to pay taxes on that support rather than being able to deduct the particular amount.

This possible change has garnered much concern. The change is not set in stone, however, as Senate Republicans also have a tax plan in which they propose that the current terms for taxing alimony remain the same. That would mean that support recipients would hold the obligation for paying taxes on the payments.

Any time taxes come into play, individuals may feel a great deal of concern. In fact, tax concerns can often play an important role in financial decisions made during the divorce process. If California residents are concerned about how this potential legislation could affect their current alimony arrangements or future negotiations for support, they may wish to speak with experienced attorneys who are undoubtedly staying updated as this legislation proceeds through Congressional channels.

Source: CBS News, "GOP plan to cut alimony tax deduction has some divorcees on edge", Nov. 16, 2017

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