A change in the federal tax law will eliminate a tax break for alimony payments that are finalized after December 31, 2018. Thus, if you are wealthy, and considering divorce, you better act quickly.

Americans who finalize or modify divorce agreements in 2019 or later will no longer be able to deduct alimony payments from their taxes. Agreements signed before the end of the year still qualify for the annual deduction. This has large financial implications for couples where one partner earns substantially more per year than the other. Many financial planners and divorce attorneys are counseling clients to make their decision this year since waiting to divorce after the end of year could increase taxes on alimony equal to 15 to 20 years of support and will shift the tax burden for the last years of a person’s working life.

Until 2019 those paying alimony to a former spouse can deduct the payments from their taxes, and, in many cases, this provides the wealthy with a potentially generous tax break. Starting in 2019 that will no longer be the case.

Even though time may be of the essence to take advantage of the deductibility of alimony payments, there are many other issues that arise when a couple contemplates divorce, especially if either one of them or both are business owners or they have dependents. Consult not only with a qualified family lawyer, but also check in with your business legal counsel and your accountant.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.