Tax Issues and Divorce, Alimony and Child Support

It’s tax season again and I thought it would be interesting to do a little blog on an article that touches on taxes and divorce.

Alimony is support specifically made to a spouse so that they are supported with food, clothing and shelter. Child support is exactly the same, in regards to the support of the child for food, clothing, and shelter.

During or after a divorce, the divorcing party has to determine how their payments will be calculated by the IRS.

According to the article, Child support is not taxable to the spouse who received the payment, and it is not tax deductible by the spouse who makes the payment. Taxes are already taken into consideration in ability to pay the support when the child support calculations are made.

The article states that, Alimony is the amount paid to a spouse for their living expenses, education, health or life insurance, property taxes, etc. It does not provide child support. The person receiving alimony will need to pay taxes on the alimony in the year it is received. The spouse that pays alimony may deduct the amount in the year it is paid, as long as the alimony meets the following conditions:

The article states that, the alimony can be deducted so long as certain criteria are met.

• The payment is made in a cash form, which includes checks, bank deposits, etc. Payments in the form of such things as bonds, stocks, money market shares, or actual objects are not considered alimony for tax purposes.
• The payment is made as the result of a legal separation agreement or divorce decree.
• The spouses do not live in the same household at the time the payment is made.
• The divorce decree does not designate the payment as nontaxable to either party.
• There can be no liability for payments after the death of the receiving spouse.

The author states that the confusion can occur when the payment is specified as one thing, but has characteristics of another. This can lead to confusion on whether the payment is deductible. This would require the help of a qualified account to help you determine whether you may deduct a payment.

If there are any legal questions you may have, I encourage you to, please contact my San Jose Divorce Lawyers office. My San Jose Family Lawyer offices assists many people who are going through family law related issues. We have many Affordable San Jose Divorce Lawyer solutions for many different budgets. We help many individuals through this very chaotic period in their life. Proudly serving the following cities, Fremont, Milpitas, Los Gatos, Cupertino, Mountain View, and Santa Clara.

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