How does ATRA affect your divorce and receipt of alimony? Contact a Miami divorce attorney to find out. – The Law Office of Scott A. Ferris, P.A.

In January 2013, the Obama administration enacted the American Tax Relief Act (ATRA) of 2012, which imposed several changes on federal tax code that may affect how divorcing parties approach alimony awards. The best way to ensure that you benefit from this legislation is to enlist an experienced Miami divorce attorney who is abreast of these changes.

One of the most widely publicized aspects of ATRA is the introduction of a new tax bracket subjected to a higher rate. Single filers who earn $400,000 or more annually must now pay a 39.6 percent income tax rate – rising from 35 percent. Heads of households earning $425,000 or greater will also pay the heightened tax.

Unless both spouses specify otherwise, alimony awards must be declared as income by the recipient and as deductions by the provider. Forbes writes that parties seeking spousal support should consider whether their award will place them in a higher income bracket – and will thereby be taxed at a greater rate. This could change how their Miami divorce attorney approaches a divorce settlement. In one instance documented by The Wall Street Journal, New Jersey attorney Bari Weinberger sought a reduced alimony payment supplemented by the continued maintenance of a home in a bid to reduce her client’s taxable income.

Parties who may be providing this form of fiscal support should consider how ATRA has changed personal deduction laws, which we will review in an upcoming installment.

If you have any questions about how ATRA will affect your divorce proceeding, contact an experienced Miami divorce lawyer. Scott A. Ferris, Esq. has worked in this field for more than 25 years, and will respond to your queries whatever the day or time. Contact him at 305-670-3330.