Alimony payments are mandatory, complicated to calculate, and have tax implications. They are complex payments that must be exact and paid on time. Failure to do either could result in you being dragged into court. So the question is: how can you maintain proper records to show as proof that you are paying on time? This article will go into the records you should keep.
Alimony (“spousal support” or “maintenance”) are payments from one spouse to another following a divorce or dissolution. It is a way for the court to ensure that divorce does not mean that the economically dependent spouse becomes impoverished. The basic theory is that one spouse sacrificed professional advancement for the benefit of the family. Therefore, the other spouse who benefited from that sacrifice should have to continue to support their ex-spouse.
You will only need your records if you are being audited, either by the court, opposing counsel or the government. Keeping these records is a defensive measure to ensure that, if audited, you come away squeaky clean. You need to detail the following information:
- Amounts paid and the date they were sent/accepted.
- A copy of the receipt signed by the receiving spouse.
- Account numbers, bank names and check numbers.
- Copies of every check/electronic transfer for payments, including a memo for the purpose of the payment.
- Keep a system of payment numbers so you can track each payment. It is also a good idea to keep all of this in an up-to-date ledger.
This information ensures that, upon being audited, you can prove continuous and reliable payments. This information is highly useful during the re-evaluation of spousal support payments. Moreover, it reduces litigation costs for you because you leave no room for the opposing counsel to challenge your veracity.
If you are going through a divorce, then you may want to speak to a lawyer. Divorces are multi-layer disputes that implicate family, accounting and legal issues. However, with a little preparation and vigilance, you can make the process smoother.