Legal Blog
The Weekly Scenario: Alimony & Tax Cuts and Jobs Act of 2017
Question: I receive alimony as a primary source of income. Does the Tax Cuts and Jobs Act of 2017 (TCJA) affect my ability to make contributions to my individual retirement account?
Answer: The TCJA eliminates the deduction for alimony paid under divorce and separation agreements signed after the year 2018. Alimony received will no longer be taxable income.
For years ‘taxable’ alimony has been treated as earned income under the rules for IRAs. This means that the person receiving it could use it to make contributions to her own IRA.
The TCJA reverses this rule as no longer will alimony be considered taxable income.
Comment: The implications of this rule change, among many others created by the TCJA, will have many implications that tax advisors are still trying to interpret.
As always, if you have any questions or would like to learn more, please contact Steve Shane at sshane@offitkurman.com or .
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 140 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eleven offices serve individual and corporate clients in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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