Getting a divorce can mean a change in tax status, as well as what you can deduct. Typically, a person who is paying alimony can deduct the payments on their taxes, and the person receiving the payments must report them and pay taxes on the money.
It is important for those who divorce in Poughkeepsie to understand how alimony will affect their taxes. It is important to have it worked into the legal divorce documents because the alimony must be mandatory for it to be deductible.
Paying a spouse just because you feel obligated can be an admirable way of handling a divorce, but in order to claim that money as deductable on your taxes, you must have the alimony officially written into a document that makes it mandatory to pay.
The document typically doesn't have to be a final decree but it must, in the eyes of the IRS, be an official mandatory payment. It could be an ordered payment through something like a divorce decree, a temporary decree or decree of alimony.
Some people might have to pay or receive child support payments in addition to alimony. These payments are entirely separate when it comes to taxes, and it is important to have clear guidelines on what money counts as child support and what counts as alimony. Child support has different tax guidelines than alimony.
Those divorcing in Poughkeepsie may want to seek help determining alimony and child support. An experienced family law attorney can help those going through a divorce determine how to work these payments into a divorce decree.
Source: Forbes, "Taxes From A to Z: A Is For Alimony," Kelly Phillips Erb," March 3, 2012