Do You Pay Taxes on Alimony?

January 25, 2023

Divorce is a complex, emotional experience. After your divorce is final, it can be tempting to settle into your new daily life without thinking about alimony. Yet when tax time comes around, you’ll need to figure out what tax laws your payments or money received fall into for your situation.

Alimony Payments and Taxes

Taxes can be confusing, but understanding them can help you avoid long-term and expensive problems. Recently, the Tax Cuts and Jobs Act did away with the alimony tax deduction for those who are to pay alimony from 2019 through 2025 as part of their divorce settlements. 

Taxpayers who divorced before December 31, 2018, still have to report any alimony payments and can claim a deduction. Additionally, the spouse who receives the alimony check does not have to include that money as part of their taxable income.

The help of a capable lawyer can help you to understand the new changes, how your situation is affected by them – if at all – and how to avoid making mistakes when it comes to your taxes. An attorney’s price can be much less than what you may have to pay in IRS fines if you don’t complete your taxes correctly.

What Qualifies as Alimony Under the New Alimony Law?

The IRS spells out its requirements that fall into alimony or maintenance payments. They include:

  • Neither spouse files a joint return with the other
  • The payment is required and made under a divorce agreement
  • Money is paid in cash (checks and money orders fall under this)
  • The former spouses are no longer part of the same household where the payment is made out to
  • If the payment is not child support or part of a property settlement
  • If there is no longer the burden of making payment after the death of the assignee

Do You Qualify for a Tax Deduction?

Learning the law is the best way to understand if payments can be a tax deduction for payers of alimony. When hiring an attorney to help you understand the law and what you need to do to comply with it, you take out all the guesswork. The right lawyer brings expert knowledge and peace of mind to your situation.

What if I Didn’t Know About the Changes?

The bottom line is that if you had a divorce agreement that included alimony before January 1, 2019, your payments fall under the rules that were in place before the Tax Cuts and Jobs Act. Your alimony falls under the new act for those with divorce agreements from January 1, 2019, through December 31, 2025.

If you fall into the timeline for the new act and you’ve filed your taxes using the old rules, you should seek legal help. Then, when you get ahead of any errors or mistakes, you can avoid having an audit or claim made against you by the IRS.

When You Need an Attorney for Your Alimony Payments in Tavares, FL

The best way to ensure you understand what laws your alimony falls under is with the help of an attorney like KJ Law, PA. The expertise, guidance, and attention to your particular situation guarantee that you’ll be able to follow the law while protecting as much of what’s yours as possible. Call them at 352-735-4342 or use their contact form to talk about your alimony today.


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