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Submitted By: Nico P. Saborse on Sep 26, 2024 3:00:00 PM
The landmark Tax Cuts and Jobs Act (TCJA) was passed in late 2017, but the law is still in the headlines today. Most TCJA provisions that affect individual taxpayers are scheduled to expire after 2025. However, there are six noteworthy exceptions that will remain on the books after 2025, unless Congress passes additional legislation to override them.
Starting in 2018, the TCJA permanently eliminated charitable deductions under such arrangements.
More specifically, the TCJA treatment of alimony payments applies to payments required under divorce or separation instruments that are:
As a result of this change, divorcing spouses can no longer shift income from the payer, who's typically in a higher tax bracket, to the recipient, who's usually in a lower tax bracket.
Important: The TCJA generally didn't change the treatment of alimony payments required by pre-2019 divorce agreements.
It's hard to keep track of which TJCA changes are permanent and which ones are scheduled to expire at the end of 2025. And it'll only get more confusing as Congress decides which (if any) of the expiring changes it will extend or make permanent in future legislation. For now, you can count on these six changes to remain in effect. For the latest tax law developments, contact your SSB tax advisor to develop tax-saving strategies for 2024 and beyond.
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