On behalf of South Tampa Law Group posted in alimony on Thursday, August 17, 2017.
When a Florida marriage ends, there are many details to sort out. Financial considerations play a large part in the separation of two people’s lives. Alimony, when applicable, is support paid directly to an ex-spouse. Child support, which is not tax-deductible, is paid to one parent for the care and upkeep of the parties’ children who have yet to reach the age of majority. Alimony is tax-deductible, although it must be appropriately named and paid in conformity with IRS requirements.
In general, alimony payments must be part of a divorce settlement in order to be tax-deductible. Payments must be made on behalf of one’s ex and they must also be paid in cash or equivalent. If an ex dies, then the obligation for the payments ceases. There are also some rules that apply, like the divorced couple must not live in the same household or file tax returns jointly.
The payments must also be totally separate from any child support. If a payment to an ex-spouse is reduced when the child becomes of age, then the total payment minus the reduced amount is equal to the alimony payment (and the rest is child support — from the initial payment). A person can only deduct from income taxes the amount that is specifically attributed to spousal support, and the IRS is typically on the lookout for creative attempts to sidestep that requirement.
Rules about alimony deductions are tricky and some legal hoops must be jumped through in order to ensure the tax deductions are honored. There are also tax forms that should be filled out and analyzed before any final divorce agreement is settled. In Florida, professionals are available to assist individuals who are going through divorce with financial planning. A family law attorney has the experience to guide a person through the planning stages of his or her divorce.
Source: marketwatch.com, “How to make your alimony payments tax-deductible“, Bill Bischoff, Aug. 15, 2017