maintenance is meant to help both spouses keep as much of the same lifestyle as possible,
even after a divorce, by having the higher-earning party make payments
to the party with a lower income. This support that helps out the lower-income
party also becomes a benefit to the paying party come tax season, if alimony
gets put down correctly. (There are some situations where it will make
more sense to not put alimony down as a deduction, so ask a tax expert
about this.) Usually speaking, however, if you can deduct alimony payments
you make, you might find yourself in a lower tax bracket, while the recipient
spouse's taxes are typically unaffected by putting down alimony as
It should be noted, however, that
not every maintenance payment is tax-deductible. It will take both financial know-how as well as legal awareness to ensure
that your maintenance payments are in compliance with the IRS's guidelines
so that they can be deducted. You can find the in-depth legal answers
you need at the Meyers Law Group, P.C., but for now, here are some helpful
tips for tax season if you pay maintenance:
Maintenance has to be given as a
cash or check payment. If you give "in-kind alimony", such as giving your vehicle
to your ex, then you cannot deduct this.
Know your agreements and court orders, such as any
separation agreements, divorce settlement terms, and even temporary support orders.
The papers should say how much these payments are, and that they are tax-deductible.
Keep to the terms of these documents.
Remember that child support and property settlements are not tax-deductible, so make sure that your maintenance is not intermixed with these separate
matters. This could mean, for example, making sure that there is no term
that says that maintenance will stop once your child turns 18, because
the IRS could say this maintenance is really
child support, which you cannot deduct. You also do not want maintenance to look like
it was simply the giving of financial assets to your spouse during
property division. Talk to a divorce lawyer on how to make sure these matters are in order.
The nuptial agreement/divorce settlement must say that maintenance ends
when the recipient passes away. This is because of the reasons listed above. It should be noted that in
many cases, you can also put in that maintenance will stop when the recipient
Live separately from your spouse/ex. At whatever stage you are in the divorce process, you and the other party
must live in separate households if maintenance is going to be deductible.
Don't file taxes jointly. A joint income tax return will disqualify you from getting your maintenance
Don't frontload. You do not want to pay a great deal extra in maintenance during the first
three years after the separation. If you do this, the extra could be recaptured
or taxed later on.
Trusted Legal Help for Divorce & Post-Divorce Modifications
While taxes are definitely the arena for a financial expert, when it comes to
alimony, then you may also need the expertise of a family law attorney. If you
are facing a divorce and need to ensure that all terms are fair and feasible,
work with the Meyers Law Group, P.C. If your circumstances have changed
and maintenances orders are now unreasonable, talk to a divorce lawyer
in Long Island about how you may be able to get these orders
modified. But you need to act now, because any unpaid payments will count against
you and cannot get discharged by a court, not even by a bankruptcy court.
Do not hesitate to
contact our firm today!