Is Alimony Taxable? What You Need to Know

 

Getting a divorce can be a stressful and overwhelming experience. There are many legal and financial considerations to take into account, including the matter of alimony. Alimony, also known as spousal support, is a payment made by one spouse to another after a divorce to help support their living expenses. If you are receiving or paying alimony, it is important to know if it is taxable or not. In this blog post, we will take a closer look at the question of whether or not alimony is taxable.

 

The IRS has specific rules regarding alimony and whether or not it is taxable. According to the IRS, alimony is considered taxable income for the recipient and tax-deductible for the person paying it. This means that if you are receiving alimony, you will need to report it on your tax return and pay taxes on it. If you are paying alimony, you can deduct the amount you pay from your taxable income. It is important to note that child support payments are not taxable.

There are some special circumstances where alimony may not be taxable. For example, if the divorce agreement specifies that the alimony payments are for a non-taxable item, such as a property division, then they may not be taxable. Additionally, if you and your ex-spouse continue to live together after the divorce, any support payments made may be considered non-taxable because they are not considered separate households.

If you are unsure whether or not your alimony is taxable, it is important to consult with an attorney or tax professional. They can help you understand your specific situation and provide guidance on how to properly report and deduct alimony payments.

It is worth noting that the Tax Cuts and Jobs Act of 2017 changed the tax treatment of alimony for divorce or separation agreements executed after December 31, 2018. Under the new law, alimony is no longer tax-deductible for the person paying it, and the recipient no longer has to report it as income. This change only applies to agreements executed after December 31, 2018, so if your divorce was finalized before then, the old tax treatment still applies.

 

Conclusion

In conclusion, alimony is generally considered taxable income for the recipient and tax-deductible for the person paying it. However, there are some special circumstances where alimony may not be taxable, such as when it is specified in the divorce agreement or if you and your ex-spouse continue to live together. If you are unsure whether or not your alimony is taxable, it is important to consult with an attorney or tax professional. They can help you understand your specific situation and provide guidance on how to properly report and deduct alimony payments. If you are looking for an alimony attorney in Orlando, FL, contact Ilvento Law today for more information.