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How do you responsibly manage your alimony after divorce?

| Jul 27, 2017 | Divorce |

In some divorce cases, alimony is awarded. Alimony is often called spousal support, but they function in the same way: one spouse pays another spouse for either a temporary or indefinite amount of time to alleviate any financial hardship that could occur as a result of the divorce.

When alimony is awarded, though, the mere payment that is made or received is not the end of the transaction. The spouses need to stay organized and track their payments. Doing so has a few benefits. The first is that, come tax time, alimony payments can be deducted from the taxable income of the paying spouse and they must be included in the receiving spouse’s taxable income.

Another benefit is that by tracking these payments and recording pertinent information, you can protect yourself in case you or your former spouse files a legal motion in regards to alimony.

So what information should you track? The amount of money paid and the check number is a good start. You will also want to track the address it was sent from and to. The bank account number, the bank itself, the date of the payment, and an actual copy of the check are all beneficial as well. If your alimony payments are not done by check and instead are done by cash, you and your former spouse should create a receipt that you both sign to formalize the transaction. 

Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony,” Accessed July 21, 2017