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Colin and Coleen Are Negotiating the Terms of a Divorce

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Essay

Colin and Coleen are negotiating the terms of a divorce in 2018. Colin is willing to pay Coleen $20,000 of alimony for five years so that she can return to school and obtain a degree. Coleen has stated that she needs no less than $20,000 after taxes and will not accept Colin's offer of alimony. Coleen is in the 12 percent tax bracket and Colin is in the 22 percent tax bracket. How much alimony must Coleen receive to have $20,000 after taxes? What is Colin's after-tax cost of this alimony payment?


Definitions:

Barcelona Supporters

Fans or enthusiasts of the FC Barcelona football club, known for their loyalty and passionate support.

Football Club Barcelona

A renowned professional football team based in Barcelona, Catalonia, Spain, known for its rich history and successes in both national and international competitions.

Meet Needs

pertains to the act of satisfying requirements or fulfilling the necessities of individuals or groups.

Tax Incentives

Financial benefits provided by the government to encourage certain activities or investments, reducing the tax liability for individuals or businesses.

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