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A tax surprise for divorcees

It may be premature to talk about taxes right now. It is obviously a major political issue, but what that means in terms of reform is that it's also completely undecided. Still, each chamber of the Republican-controlled Congress has its own proposal under consideration. There's also the Trump plan, though many observers say it lacks any real detail.

One thing that the House measure currently includes is something that anyone in Texas considering divorce – especially if they are approaching retirement – might want to keep an eye on.

Call it a divorce penalty

The provision that is raising many eyebrows is one that would raise the cost of divorce for many Americans. It would do that by eliminating the tax deduction that divorcees who pay alimony can now claim on their taxes. On the other side of the coin, the recipient of such spousal support would not have to claim it as income on their returns.

Arguing for the proposal would seem to be one estimate that says it will add $8 billion to government coffers over 10 years. But some pundits note that's a drop in the bucket compared to the $1.4 trillion in overall cuts the House Republicans want.

Critics question whether that amount is worth the trouble the change will cause. They predict it will raise the financial strain of divorce, spur more support payment litigation and hurt those on the receiving end – most often women.

As more than one legal observer offers, the current support payment tax breaks and the one on mortgage interest (which the House bill also scales back) significantly help divorcing couples as they try to seek to make ends meet.

It may be that all these facets of proposed tax reform are merely bargaining chips that will eventually be taken off the table. But it would be premature to talk about that, too.

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

She will take the time to understand your individual needs and develop a comprehensive solution to protect your rights and interests.

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