The way alimony is determined in California is different than the way child support is determined. In deciding on the specifics of spousal support, the court has wide discretion. Courts might consider factors like the emotional state, financial condition, physical condition or age of the parties as well as the length of time they were married and their marital standard of living.
If parents in California are struggling to keep up with child support and alimony payments, they are not permitted to discharge those debts in bankruptcy. The wages of a parent who does not pay child support could be garnished. The parent's credit could also be damaged, and failure to pay child support could even result in jail time.
People planning to file for divorce may be particularly concerned about the financial impact of the end of their marriage. This can be especially true for couples with a high-asset divorce and significant income, as spousal support and alimony may be a factor in the split. There are changes being made to how spousal support is handled in terms of taxation that can be significant for couples who expect to complete their divorce settlements in 2009 and later.
If an individual signs a divorce agreement or similar document after 2018, he or she may not get a tax deduction on alimony payments. That may have a significant impact on divorce agreements in California and throughout the country. For the past 75 years, alimony payments have been eligible for a tax write-off while they are counted as income to the recipient. The change is just one of many included in the new tax bill.
One part of the proposed tax reform legislation that may impact some people in California is the proposal to do away with the alimony deduction. Under this proposal, people who are ordered to pay alimony to their ex-spouses would no longer be able to claim their payments as deductions on their taxes.
On Sept. 18, actor David Hasselhoff reportedly asked a California judge to end the alimony payments he was required to make to his ex-wife. He had reportedly been making monthly payments of $21,000 to his ex-wife from 2006 to 2016 when those payments were cut down to $10,000 a month. They were married for 16 years before getting divorced.
When a person is considering purchasing a new home, they might not be aware that receiving or paying alimony can impact their ability to get a mortgage. Lenders have to look at a person's whole financial history before making a decision on whether to award the mortgage, and alimony payments can become the difference between being accepted or denied.
When a California couple goes through a divorce, the lower-earning spouse may request alimony as part of the court order. Alimony is often awarded to a person who earns no income or a much smaller one than the other spouse. In many cases, spouses who request alimony are those who gave up or did not even pursue a career in order to raise children or otherwise take care of the household.
After a divorce, many California couples are confronted with the requirement that one spouse pay alimony to the other. This can be an ongoing issue both financially and personally. Those who pay or are receiving their alimony on a monthly basis need to know that they could have a lump sum option. This might be attractive to both parties.
A California resident whose divorce has been formalized would begin to file as a single party with the tax return for that year. Being ready for that first tax return is important, making it wise to collect needed financial records even as the marital matters are being completed. It is important to be sure that one's Social Security number is separate from an ex-spouse's. It is also important to clarify matters relating to using deductions for children on income tax returns before a settlement is finalized.