When tax season rolls around, many Americans have an array of concerns and questions. Furthermore, those who have been through a divorce may be unsure of the different ways that divorce could affect their tax return. In a recent post, this blog examined child support and tax obligations. However, in Boston, Massachusetts, and throughout the U.S., it is vital for you to understand how alimony could affect your tax return, whether you are responsible for paying alimony or receive payments.
The Internal Revenue Service states that alimony payments that people receive are to be reported as taxable income. Moreover, those who are obligated to pay alimony can have their payments deducted. However, there are a number of requirements which must be satisfied in order for alimony to be included in personal income or deducted. For example, the two parties cannot file a joint tax return, the payments cannot be considered child support and the payments must have been made using an approved method of payment.
With regard to alimony, various hurdles may arise. Whether someone was unaware that they had to report alimony payments on their tax return or cannot afford to make their alimony payments, a number of issues may arise. As a result, it is pivotal for you to properly handle any alimony matters you are struggling with and fully understand any responsibilities that you have.
You should also remember that this post was compiled to offer insight on alimony and taxes and is not to be viewed as a substitute for legal counsel.