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Ensuring that alimony payments are tax-deductible

A Texas couple that is going through a divorce or legal separation may have heard that the alimony is tax deductible. However, it is necessary that several conditions be in place for it to be so.

The alimony must be specifically mentioned in the divorce or separation agreement, and it must end on the recipient's death. The divorce agreement must not specify that the payment is something other than alimony. An example would be if it said that the payment would not be considered taxable income. The payment must be in cash or the equivalent of cash, and it must be made to the former spouse or on behalf of the former spouse. For example, the payment might go toward a mortgage obligation.

The payment cannot be child support. If the amount paid that is child support is not specified, it can be identified in several other ways. Payments that end on the child's death, marriage, finishing school, leaving home, getting a job, earning a certain amount or reaching a certain age are the child support part of the payment and should be considered separate from alimony for tax purposes. Finally, the couple cannot file a joint 1040 form or live together after the separation or divorce.

Alimony might be temporary or permanent. Alimony and child support as paid during the divorce process might differ from what arrangements will be after divorce although the amounts paid before the divorce will probably be taken into account. Alimony may end after the recipient trains for a new, higher-paying job or after a certain period of time. If the income of the person paying spousal and child support changes, that person might need to apply for a modification of the amount. This can often be handled by an attorney.

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