The only thing worse than your ex taking all your money is the government taking it, too. Divorce has several tax implications that will affect how you file. Knowing these changes ahead of time can prevent mistakes and last-minute stress.
Alimony, which Texas law refers to as spousal maintenance, can be a topic that raises concerns for someone contemplating divorce. It does not help that a lot of misinformation continues to circulate and generate misplaced panic for higher earners.
Alimony, or "spousal support," is when one ex-spouse must send payments to the other. The court orders or enforces spousal support whenever there is a disparity in income between the spouses. For example, if Spouse A is a successful surgeon and Spouse B is a gas station attendant, the court will likely order Spouse A to pay support to Spouse B.
Taxable income refers to the amount of money you earn in a given year from which the IRS may collect taxes. Generally, taxable income is the sum of all your revenue minus adjustments and deductions. Alimony, or spousal maintenance payments, are considered adjustments to income. In short, spousal support is deductible from your income.
In short, yes, you should absolutely keep records of any spousal support payments you receive. Whenever a dispute arises the courts will look to and rely on any records that evidence the ongoing conduct of the parties. The person who is able to produce the better and clearer records will have the upper hand during litigation. Additionally, spousal support payments are included in taxable income therefore, it is a good idea to track payments received in case you are audited by the IRS.
Spousal support is not automatically awarded. There are a multitude of factors that the court considers when determining if you should pay spousal support. Spousal support (also called "spousal maintenance" or "alimony") is awarded only to maintain your ex-spouses standard of living. If your ex-spouse is able to support themselves with their own income, then you may not have to pay spousal support at all. This article will go over some of the factors the court considers in determining whether or not to order support.
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.
Spousal support, or "alimony" is not automatic, even if you have a prenuptial agreement. The court will still examine whether or not it is fair or necessary to award spousal support. Typically the court will consider the health, education, work history and current job prospects for your ex-spouse. If the court finds that there is a severe disparity in relative economic strength, then the court may award support to ensure that divorce does not result in your ex-spouse losing their standard of living.
There are two ways that you can pay spousal support, lump sum and monthly payments. This post will discuss the benefits and potential pitfalls of a single lump sum payment. Alimony, or "spousal support," is money paid by one ex-spouse to the other to compensate for financial disparities.
Alimony, or "spousal support," is payment made from one spouse to the other to balance out the economic disparity between the two. Spousal support, although it is less common today than in previous years, is usually ordered following a formalized divorce or separation. The point of alimony is to ensure that the dependent spouse is not rendered penniless due to a divorce. It allows a spouse that forewent professional or educational development for the benefit of the marriage or children. This post covers the various records you should keep of spousal support payments and receipts.