Divorcing couples are often surprised by the interplay of alimony and taxes. Though many couples don’t realize it, spousal support carries a number of tax implications.
For starters, spousal support can be either taxable or tax deductible, depending on whether you’re receiving support payments or making them. And there may be other considerations as well, depending on your circumstances.
Here are three reminders to keep in mind about spousal support and taxes:
In some situations, a marital settlement agreement or decree may explicitly spell out which payments are to be considered spousal support and which are not. Your finalized agreement is a good place to start when figuring out which payments you should report or deduct for tax purposes.
For more help with the tax implications of spousal support, you may want to consult an experienced tax attorney. Your tax attorney can help you figure out a plan that puts the most money in each person’s pocket after taxes are taken into account.
Related Resources:
- Need help with your taxes? Get your tax issue reviewed by an attorney for free (Consumer Injury)
- Four Steps to Protect Your Finances During a Divorce (FindLaw)
- Divorce, Taxes and the Fiscal Cliff (FindLaw’s Law and Daily Life)
- How Long Does Spousal Support Last? (FindLaw’s Law and Daily Life)
- The FindLaw Guide to Spousal Support (FindLaw - Free Download)
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