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The Impact of Changing Tax Laws on Divorce

The Impact of Changing Tax Laws on Divorce

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As most people know the US tax laws are changing in many ways. Those changes will likely have some impact on almost everyone in West Michigan and in the rest of the United States. However, there are many changes to the Tax Code that most people may be unaware of until changes in their own lives cause them to be exposed to the effects.

Some of the new tax laws will affect couples considering divorce in several ways, such as the changing laws regarding spousal support and tax deductions. However, there are business implications as well. For example, the new laws and related deductions may impact small business owners by potentially affecting their business valuations.

With so much change surrounding the US tax laws, and the implications those changes could have, it is extremely important for anyone considering divorce to discuss the process with an experienced attorney and tax professional immediately. Don’t wait until it’s time to file business and personal taxes next year, ask questions from an experienced West Michigan attorney immediately if you have any major life changes on the horizon.

Divorce is difficult no matter what the circumstances. Many people will be exposed to information from friends and family who have been through the process, and who believe they can provide sound advice. Even if they were able to share information regarding the divorce process or tax implications that was correct in the past, that information will probably not be relevant now.

If you are considering divorce, it is extremely important that you do not wait to discuss the legal and tax implications with an experienced attorney. The decisions you make today could affect your business and personal tax filings in the following year, or possibly for years to come.

We will be featuring a series of articles highlighting the tax changes and what they mean for couples considering divorce, as well as the impact on child support, spousal support, and business valuations. Please stop back for more information on these topics and others that can help you to be better prepared.

It is important that you act now, so please contact the experienced West Michigan divorce attorneys at Johnsen Wikander today and let us help you through this difficult time.

New Tax Laws May Affect Alimony Settlements

New Tax Laws May Affect Alimony Settlements

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The end of a marriage is one of the most difficult and stressful events anyone can go through. Many people have compared their divorce to the death of a loved one or the loss of a limb. Divorce is hard but entering into divorce proceedings unprepared will only make matters more difficult.

With the extra layer of uncertainty provided by our current political climate, it is extremely important to consider the effects that changing laws and tax codes may have on the outcome of a divorce. Any legal changes that affect personal finances, and how they are handled during and after a divorce, can be especially impactful.

Currently, proposed tax changes will end a law that has been in place for more than 70 years. Since 1942, alimony payments have been considered a deductible expense on personal tax filings. At the end of 2018, that law will be cut from the books.

The impact of such cuts on West Michigan couples could be far-reaching. Aside from the increase in cost to the payer, alimony payments from divorce may now become an even more hotly contested issue in divorce cases since it is likely to push either side in the case to disagree with the amount requested.

For the payer, the law means they will carry more expense for years to come. For the payee, the law could mean that they get a lower settlement in their divorce case, potentially affecting their quality of life. This major change has the potential to drive divorce rates up for the remainder of 2018.

For couples already struggling to find even ground in a rocky case, contesting an alimony request could add one more layer of turmoil and difficulty to their divorce proceedings. Before taking steps in any direction, spouses considering divorce should educate themselves on the changing laws and the potential effects.

Anyone considering divorce in 2018 should look to an experienced divorce lawyer for assistance and to become educated regarding the outcome of their decisions. Couples could easily end up fighting over a decision that may have been clear before changes to current laws. This could affect their ability to maintain a civil relationship once their divorce is final, which is an especially disruptive outcome for couples with children.

With any divorce, both parties should consider the importance of education and preparation. Please contact the experienced West Michigan divorce lawyers at Johnsen Wikander for help in understanding current and upcoming changes and how they could affect your case.

Social Media can be Divorce Case Evidence

Social Media can be Divorce Case Evidence

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Social media and personal messaging apps, such as those associated with Facebook and Twitter, are being used for more personal communication than ever. Facebook friends or Twitter followers are easily found in the list of contacts associated with the user’s account, so many people never bother to add them to any other contact list.

Convenient private messaging apps are also available for phones and computers. Some dedicated communication applications, such as Snapchat, are used to send sensitive information because their short-lived messages disappear from the sender’s account after a predefined time. Each messaging app and social media outlet has its own pros and cons, but all of them share something in common – their content, when discoverable, can be used as evidence in divorce cases.

Social media content can show a wide variety of evidence that a divorce lawyer can use to help benefit their client against there spouse. Photos can be especially harmful, but text messages and online comments can be equally damaging when they contain proof of a lie or illicit behavior. A cheating spouse (or their friends) may post photos of themselves out to dinner or vacationing with another party, which may present usable evidence to a legal team.

Social media can also be used to prove, or disprove, a person’s state of mind at the time they created a post. Comments that threaten to harm other people, or the poster themselves, can affect important pieces of a divorce case such as child custody decisions. Even if the threats are hollow, they can still be used to show potential intent or instability. Angry messages or threats can even be used to justify a personal protection order.

Many people post their daily activities without thinking. Posting on social media has become so commonplace that people rarely stop to consider the implications of their actions. However, bragging online about a financial windfall or hidden wealth, or claiming to be unemployed while posting pictures of new cars or expensive vacations, could provide information that impacts property settlements or alimony.

For more information or a consultation, please contact the experienced West Michigan divorce attorneys at Johnsen Wikander to discuss your current situation and let us help you through this difficult time.

The Truth About Divorce Rates

The Truth About Divorce Rates

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We have been told for years that more than half of all marriages end in divorce. The entertainment news, friends, and social media spit out facts and figures that are often repeated until they become truth. But, what is the real truth?

We’re all privy to celebrity divorces when every detail is broadcast into our living rooms each night. Ben Affleck and Jennifer Garner, Chris Martin and Gwyneth Paltrow, etc; their struggles are discussed over dinner and in break-rooms across the country.

The real truth: divorce rates are falling in West Michigan, and nationwide.

According to the Michigan Department of Health and Humans Services, Michigan divorce rates have declined overall by more than 25% in the last 15 years. Since the 1980’s, divorce rates have been declining steadily from their most recent peak.

Although the general marriage rate has also fallen since the 1980’s, it has also begun to increase again in recent years. However, today’s couples are waiting longer before tying the knot, and one or both partners standing at the altar may also have already experienced divorced.

There are several possibilities for the drop in divorce rates, but there is little hard evidence. With many couples embracing marriage for the second time, it’s possible that some “trial and error” may be a factor. Couples waiting longer to get married may have also worked out some of the uncertainty other new spouses face when sharing a home for the first time.

Marrying later may also mean that both partners have had time to mature. Compatibility is now a more important factor in partnerships as well, meaning couples are more likely to experience successful, loving partnerships longer, and later, in life.

No matter what the reason, the divorce rate has definitely seen its peak, and has begun its descent back to earthly levels. However, there is still a fairly high percentage of marriages that just don’t work.

If you are struggling to find the truth about divorce, please contact the experienced West Michigan divorce attorneys at Johnsen Wikander today. Let us help you navigate the uncertain path ahead.

 

Proposed Tax Changes - Impact on Divorcing Couples | Johnsen Wikander P.C. West Michigan Divorce Attorneys

Proposed Tax Changes – Impact on Divorcing Couples

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Major changes to the U.S. tax code have resurfaced as part of the nightly news during most modern election cycles. However, the new administration appears to be intent on pushing through some form of change, parts or all of which may soon come to pass. For couples who may be considering divorce, some of those changes could have far-reaching effects on one or both spouses.

The IRS has a post on their blog ominously titled “The Tax Consequences of Divorce.” Tax law is challenging enough before throwing a divorce into the mix. A fair settlement is important, but divorcing couples need to carefully consider the effects of their actions on the long and short-term financial stability of both parents and on their children.

The New York Times has a set of charts that help explain the proposed tax plan. Some of the potential changes to the current tax code will affect exemptions available to one or both spouses. The possible reduction in the number of tax brackets may also change the income level with which either partner identifies, creating financial strain where none may have previously existed.

One of the most important issues currently under consideration is the tax implications of alimony. Under current tax law, alimony is deductible by the spouse who pays out the alimony payments and included as income to the recipient. Under the proposed changes, the payments would no longer be deductible. If the payer is also reclassified under a higher tax bracket their financial impact may be much more dramatic than expected.

Other tax implications, such as dependency exemptions and child support, may not be under consideration today, but that does not mean they will be completely ignored. Although child support is currently not taxable to the spouse receiving the payments, this should be carefully watched for any changes.

With or without tax code changes, there are many reasons to consult a West Michigan accountant who is familiar with divorce implications on taxes. It is also important to discuss the effects of current tax obligations and potential adjustments with a qualified Grand Rapids divorce attorney, such as Johnsen Wikander, before filing any paperwork.

Please contact Johnsen Wikander today and let us help guide you through the many challenges of divorce.

Divorce Rates In New Study Show The Stress Of Michiganders

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Wallethub recently released a new study that ranked how stressed 150 of America’s major cities were. Furthermore, the website ranked them in order of least to most stressed out. Although Grand Rapids ranked 119th, Detroit topped the list at number one. Although Michigan seems to be divided in terms of stress levels, Wallethub’s data may show why the two cities differ so greatly. Read more