Boca Raton Divorce Lawyer

Alimony and Taxes

Divorce is almost always confusing and frightening. It is possible that everything you and your spouse have shared together has become a point of contention. Emotions run high, and your whole life can seem turned upside down. As such, it is understandable that sometimes the nuts and bolts of divorce are the last thing on your mind.

But it is important to understand the ramifications of the divorce and how they can affect your finances. One of the most obvious financial implications of any divorce is the topic of alimony. But what is alimony, and how does it work?

What is Alimony?

Alimony is a legal remuneration in which one spouse must make set payments to the other after a separation or divorce. It is important to understand that alimony is not an absolute right, but rather, an additional settlement in the divorce that can be granted by the court. If the parties do not agree to the terms of their divorce in a legal instrument, the court can make a decision about the terms and conditions of the alimony based on testimony presented by both sides.

Alimony is unique and separate from child support, which is a similar but substantially different court-ordered remuneration and subject to very different tax status. Child support is specifically a payment from one spouse to the other for the care of children that resulted from that union.

What Affects Alimony?

The courts look at various factors when determining the value of alimony payments, including:

• The duration of the marriage
• The age of the respective spouses at the time of divorce
• The amount of time the spouses were separated during the marriage
• The relative incomes of the spouses, and the future earning power of the spouses
• Who, if anyone, is at fault for the divorce
• The health of each spouse

In addition, it is much more likely for women to be granted alimony than men.

Taxation of Alimony

For tax purposes, while alimony may be excluded from the payer’s gross income, it must be included on the recipient’s gross income. Additionally, the following criteria must be met for the payments to be considered alimony:

• The payment must be a cash payment
• The payment is specifically due to a divorce or settlement instrument
• The payments are not specified as specifically “not alimony”
• The payer and the recipient do not share a household
• The payments do not have to be made after the death of the recipient

Contact Us

If you have any questions about alimony, or if you are considering a divorce, contact the Boca Raton divorce attorneys at Eric N. Klein & Associates, PA at 561-353-2800 today.