The process of dissolving a marriage is no doubt overwhelming from both a financial and an emotional standpoint. However, the new tax code is making it that much more complicated for many couples, especially those with children and a family home. Here is a look at how the new law will affect couples in Montana going through divorce this year and beyond.
When it comes to the family home, homeownership may not be as attractive anymore under the new law. This is because the law now places a cap on deductions for both local and state taxes at no more than $10,000 per year. This change may especially impact people in states featuring high taxes on property, but it could also affect those with expensive homes in low-property-tax states, too. In this situation, some divorcing individuals may find it more beneficial to rent homes rather than owning homes.
In addition, there will be no more personal exemption deductions through 2025. Instead, parents who claim children on their taxes will receive a child tax credit aimed at reducing their tax burden dollar for dollar. This is an exceptionally valuable perk. Thus, figuring out which parent should claim the children post divorce will be more important than ever during the next few years.
Although divorce in Montana can certainly be complicated, two spouses going through divorce may make the process a little easier by using negotiation or mediation, rather than litigation, to address their divorce issues. After all, these processes tend to be less stressful and less costly than going to trial. However, an attorney can provide the needed guidance to navigate even the most complex of divorce proceedings either outside of court or at trial, based on the circumstances surrounding the divorce.