Taxes and spousal support: Some important considerations

One of the most hectic periods of the year for many Americans is undoubtedly tax time. Forms and receipts must be gathered, intricate tax forms must be carefully reviewed and seemingly complex calculations must be made. Although Tax Day 2012 is still many months away, it’s never too early to talk about beneficial deductions – this is especially true if you are divorced.

If you are recently divorced and paying spousal support, you may be aware that your former spouse must report it as income to the Internal Revenue Service (IRS). However, did you know that you may also be able to deduct spousal support payments from your federal income taxes?

In the next few posts, we will take a short look at some general tax guidelines provided by financial professionals for taking advantage of the spousal support deduction.

  1. While it may seem obvious, financial professionals advise that the spouse paying alimony/spousal support must file a separate tax return (1040 form)
  2. In today’s troubled economy, more and more divorced spouses are choosing to live together to save money – perhaps taking designated rooms or floors in the house. However, financial professionals advise that you must be living in a separate residence from your spouse in order to claim the deduction. Why? The alimony/spousal support would be going to shared living expenses (heating, water, electricity, etc.).
  3. All spousal support payments to a former spouse must either be in cash or in some type of cash equivalent (check, money order, etc.), say financial professionals.The tax code does not allow former spouses who have simply transferred goods or property to another spouse to take the deduction.
  4. Financial professionals advise that payments made on behalf of the former spouse to a third party (attorney, mortgage lender) count toward the deduction for the paying spouse. Still, the spouse for whom the payments are made must complete a written request outlining the terms of the agreement beforehand.
  5. Given the complexity of the tax code and the relatively sizeable sums of money involved, it can be difficult to keep everything separate. However, financial professionals advise that those parties seeking the spousal support deduction must be certain to keep spousal support separate from child support when completing their taxes.

To be continued …

To learn more about divorce, alimony/spousal support or property division here in Texas, contact an experienced and skilled legal professional. Names have been withheld to protect the identity of the parties.

This post is for informational purposes only and is not to be construed as legal or financial advice.

Stay tuned for more from our Ft. Worth family law blog …


Business Insider, “10 steps to take to advantage of your alimony tax deduction” Oct. 30, 2011