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What are the tax implications of alimony?

A typical part of many divorces in Florida is an order of alimony. Alimony is spousal support payments that one spouse pays to the other after the marriage to help him or her afford living expenses. The details of alimony vary on a case-by-case basis. Regardless, it is important to understand how to handle your alimony in regards to taxes.

According to the IRS, whether you receive or pay alimony will affect what happens with it on your taxes. If you receive alimony, you must report it as income. If you pay alimony, then you can deduct it as an expense.

You also must ensure the payment is actually alimony under the IRS description. This means that it is in your court documents as alimony or spousal support specifically. It cannot have a different designation in your divorce agreement. It must be a result of a court order. If you are paying money to your ex-spouse voluntarily, this is not alimony. Other types of support, such as child support, is also not alimony for tax purposes. Finally, there cannot be a liability of payment after the death of either of you as the IRS does not consider this alimony.

In addition, you cannot file a joint return or live together and include alimony on your taxes. You also must pay your alimony by cash, check or money order.

Not properly disclosing alimony on your taxes, specifically if you receive the payments, could result in issues with your return. You could face fees and penalties for not disclosing your income. This information is for education only. It is not legal advice.

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