Did you know that alimony can impact your tax return? Alimony, also called spousal support, payments are made from one former spouse to another as part of a divorce or separation agreement. For payers of alimony, you can deduct the payments from your taxable income. For recipients of alimony, you must include the payments as part of your taxable income. The IRS will compare your former spouse’s tax return with your tax return to make sure the reported alimony payments made match the reported alimony payments received.
Keep in mind that child support is separate from alimony. Child support should neither be deducted nor counted as income. Taxpayers frequently get confused when they are unsure which payments are child support and which payments are alimony, leading to mistakes on your tax return.
If you’re wondering how to handle an ex-spouse’s payments on your tax return or you’re not sure which payments to a former spouse are deductible, just call on Taxation Solutions, Inc. We are standing by to put our 40 years of experience to work to resolve your tax problems. Give us a call today to get started.