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Potential tax implications of your Texas alimony case

Alimony is the term commonly associated with payments made by one former spouse to another after divorce. In Texas family courts, alimony is now called spousal maintenance. Typically, a judge will examine multiple factors including the duration of the marriage when making a determination to order one party to provide maintenance to another.

However, it is important to know that Texas laws also permit some post-divorce payment agreements between both parties. Sometimes referred to as "contractual alimony," this type of spousal maintenance is usually formed through an agreement between both divorcing spouses.

Contractual alimony can be especially important to you if you have been married for a long time and the court is likely to award your spouse some form of spousal maintenance. Arguably, the best reason for this is because the manner in which the Internal Revenue Service treats those payments. Typically, a party making payments in contractual alimony situations can include those payments as deductible from their incomes.

This can be quite significant when you consider that Texas does not allow permanent spousal support. In other words, Texas courts view the award of spousal support as a way to temporarily help a divorced spouse began to provide for him- or herself after the marriage has ended. Alternatively, alimony that is agreed upon between both spouses can last for whatever time they specify in their post-divorce agreement.

A consultation with a Texas family law attorney can prove helpful when you are determining which path may be best for your specific situation. If it is likely that you are going to have to pay spousal maintenance, then asking your spouse to consider a reasonable alternative may be a mutually beneficial outcome.

Source: Statutes of the Legislature of the state of Texas, "Chapter 8, maintenance, subchapter A. General provisions," accessed March. 30, 2015

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