The new federal tax code that may have significant impacts on divorcing spouses in Idaho beginning in 2019.  Under the old tax code, a spouse paying spousal support to the other spouse either while the divorce was pending or after the divorce, was able to deduct the payments on their taxes.  Typically, that was a positive for the paying spouse.  The spouse receiving the payments paid taxes on the payments, just like any other income they would receive. Typically, that was a negative for the receiving spouse. 

Under the new tax law, and beginning January 1, 2019, and continuing until the new tax laws are changed, the paying spouse will no longer be able to deduct their payments to the other spouse on their taxes.  That is likely a negative for the paying spouse.  The spouse receiving alimony will not have to count the payments as income for tax purposes.   That is likely a positive for the receiving spouse. 

The new rules currently only apply&

Sometimes, a problem involves the law, but that does not necessarily mean litigation.  Sometimes problems just need creative legal solutions.  That takes creative lawyers and parties to the problem who value a mutually agreeable resolution over being found to be “right” in a court of law.  While Jones & Swartz lawyers base in Boise litigate cases when necessary, they also take pride in their ability to assist clients with finding a creative legal solution. 

Imagine there was one orange, but two people who wanted it.  Both parties are willing to go to court to get it.  There are lawyers who will take the matter right to court.  Jones & Swartz lawyers will, at least, inquire if taking it to court is the only and best option.  After all, by the time the dispute makes its way through court, the orange is likely to be rotten and useless to both parties fighting over it, and they will both have paid a lot in attorney fees and costs for nothing.           

The party who hired Jones & Swartz is already benefiting from creative legal solutions by hiring Jones & Swartz, but for the other party to benefit as well, their lawyer needs to be more concerned about their client’s wishes than running up lawyer fees.   So, let’s say the other party hires a lawyer who is willing to at least talk through things to learn if litigation is the only option.  The parties and lawyers learn that both parties want the orange and all of it.  As such, splitting the orange in half will not work.  The lawyers and parties cannot stop there.  They need to learn why each party wants the orange and whether each party’s desire excludes the other party’s desire.  This takes cooperation, persistence, good lawyers to help clients focus on goals, and, best of all, not as much in attorney fees as would be spent in litigation.   

Turns out, one party needs the whole orange to make orange oil.  The other party wants to make juice.  Turns out that neither desire excludes the other and both parties can get what they want.  Orange oil is made from the peel of the orange, both the fruit.  Orange juice is made from the fruit, not the peel.  Now, the lawyers get to work drafting a settlement agreement to memorialize the creative legal solution of transferring ownership of one part of the orange to one party and another part of the orange to another party.    

Not every dispute is as simple of this example, but it is worth at least making the inquiry into whether it could be.  Look for creative legal solutions before looking to litigation.  Look to Jones & Swartz’s lawyers for both.