Tax Tip
Alimony can affect your tax return
Did you receive alimony in 2013?
You're probably aware that alimony you receive is
taxable income. However, determining what's considered alimony may not be as
simple as it appears at first glance, because you can receive several types of
payments when you divorce or separate from your spouse.
For example, say your agreement includes a noncash
settlement such as a house. That's not alimony, and generally is not taxable to
you. Voluntary payments made in addition to, or without benefit of, a written
court document are generally not alimony, either.
So what is alimony? Alimony is broadly defined as
payments you receive in cash from your former spouse under a divorce decree or
separation agreement. The payments can't be treated as child support or
property settlements in the terms of the legal document, and they must stop at
death. Other requirements include living in separate households and not filing a
joint federal income tax return.
When you're sure the payments you receive are alimony,
you'll need to report them in the year of receipt, using the standard Form
1040. You're also required to provide your social security number to your
ex-spouse, and you could have to pay a penalty if you refuse.
Please give us a call to discuss the effect of alimony
on your tax situation. We can help you plan your financial future.
Joseph C Becker, CPB, MBA, CQP
Ten Forty plus Quality Tax Preparation & Financial Services
www.tenfortyplus.com
281-397-7777, Fax 281-397-7443
joeb@tenfortyplus.com
Ten Forty plus Quality Tax Preparation & Financial Services
www.tenfortyplus.com
281-397-7777, Fax 281-397-7443
joeb@tenfortyplus.com
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