In cases where alimony payments have been ordered by a Texas court as part of a divorce decree, both parties need to keep meticulous records concerning payment. This allows both parties to protect themselves from tax liability issues, as spousal support is deductible for tax purposes by the party who pays it and is taxable income to the recipient. Additionally, both sides can defend themselves from further legal action by keeping thorough records.
The party paying spousal support should retain, at a minimum, a list of what payments were made, for what amount, and when. Carbon copies of checks used to pay alimony or receipts for cash alimony payments should also be retained. These should be clearly marked with the date of payment and the month for which payment was being made. In the case of cash transactions, the recipient should sign the receipt.
For the recipient, records showing the date and amount of payment, the account number upon which the check is drawn or source of a money order, if appropriate, or a copy of the signed and countersigned receipt for cash transactions should be maintained. All these documents should be kept by both parties for no less than three years, and they will serve to provide a legal paper trail in case the other spouse stops making payments.
An attorney may counsel a client on what the tax benefits and penalties of alimony are, and assist the client in establishing good records of all transactions paid or received. In addition, the attorney might petition the court on the client's behalf if one spouse stops paying alimony or the other claims to have not received payment, to help ensure the client receives the spousal support the court has decreed.