ver 50% of marriages end 4. If legally separated under a
in divorce in the United decree of divorce or separate
States. Many divorce maintenance, you and your former
decrees include provisions for spouse are not members of the
the payment of alimony. The IRS same household when you make the
takes the position that such payment,
payments constitute a form of
income and create an alimony tax 5. You have no liability to make
deduction for the person making any payment (in cash or property)
payments. after the death of your spouse or
former spouse; and
According to the IRS, alimony
payments are taxable to the 6. Your payment is not treated as
recipient in the year received. child support.
In turn, the person paying the
alimony can claim a deduction for If you are receiving or paying
the payments if the following alimony, you must use Form 1040
tests are met: for your personal taxes.
Regardless of income levels,
1. You and your spouse or former deductions or miscellaneous tax
spouse do not file a joint return issues, you cannot use Form 104A
with each other, or Form 1040EZ.
2. You pay in cash (including In preparing your tax return, the
checks or money orders), person receiving alimony will
report the information on line 11
3. The divorce or separation of Form 1040. That person must
instrument does not say that the also provide their social
payment is not alimony, security number to their former
spouse or face a fine of $50. The
person paying the alimony can of Form 1040.
claim the deduction on line 34a
About the Author:
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
Source: www.isnare.com
