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Is Alimony Tax Deductible? Yes, But ...

In general, alimony (or spousal support) refers to payments from one spouse to another following a divorce or separation. Alimony is not a requirement of a divorce, and it is up to the judge to determine whether alimony is needed on a case by case basis.

Did you know, that in most situations, alimony is tax deductible for the person paying the alimony and is classified as taxable income for the person receiving the alimony payments, report FindLaw’s experts? This is why alimony guidelines suggest that you keep records of all payments and acceptance of alimony.

It often happens that after a messy divorce, the spouses will challenge (or, in some situations, the IRS will look into) amounts that are paid and accepted as alimony. If you do not have documentation that shows just how much was paid or accepted, the person paying alimony may end up losing the tax deduction for the alimony payment and could even be ordered to pay the other spouse any payments that were not documented.

Generally speaking, the person that is responsible for paying alimony should have the following documents:

  • A document that has a list showing when each payment was made.
  • Copies of each check that is used for alimony payment.
  • Receipts for each alimony payment that is made by cash.

Why do you have to keep such deep records? Because alimony audits exist, and you don't want to be in the IRS's cross-hairs. The last thing you want after a divorce is to end up in a dysfunctional relationship with an Uncle (as in Sam).

For more information on alimony tax audits please see below.

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