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Claiming alimony as a tax deduction

In Texas divorce cases, alimony is sometimes a major issue. When couples have been married for long periods of time, the courts may issue alimony orders if there is a disparity in the incomes of the spouses. While spouses may not like being ordered to pay alimony, the payments can be deducted on their tax returns as long as the orders or agreements are drafted correctly.

The Internal Revenue Service allows spouses who pay alimony to deduct their payments on their tax returns. This deduction is qualified by certain guidelines that the payments must meet before the deduction will be allowed. If the payments do qualify for the deduction, the payee spouses must also report the amounts they receive as taxable income on their tax returns.

In order to qualify for the deduction, the alimony must have been ordered in a divorce decree or be made pursuant to a divorce settlement agreement. Alimony must be paid in cash or equivalents, and the payments must either be made directly to the payee spouses or third parties on their behalf. Alimony obligations must terminate on the death of the payee, and they cannot be designated as child support. If the ex-spouses remain living under the same roof or file joint tax returns, the alimony payments will not qualify for the deduction.

Alimony is one of numerous divorce legal issues that might arise in dissolution matters. When a spouse decides to divorce, they might want to get help from a family law attorney who is knowledgeable about alimony and other property division and support issues. Lawyers may advise their clients about what to expect. They may also work to help their clients obtain agreements that will be less financially burdensome and with fewer tax implications. If agreements are not reachable, the attorneys may litigate for their clients in court.

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