When it comes to finances post-divorce, alimony and child support could have a big impact on the financial health of Texas residents. Even before reaching a support agreement, people who are divorcing need to consider how paying and receiving alimony and child support will affect them, including their taxes.
Alimony must be listed as income by the receiver and can be deducted by the party paying alimony. Child support is neither deductible nor considered income Before accepting a support offer, the real worth, after taxes, of the amounts offered must be evaluated. For example, for recipients who are in the 35 percent tax bracket, a subtraction of 35 percent of the total alimony payment must be made to understand what they are truly receiving after the money is taxed. With this amount identified, they can then consider the total amount they will receive when that amount is combined with the child support amount.
There are other things that the parties need to consider before coming to a support agreement. These include the age of the children to calculate how long child support will be paid, who will be responsible for paying the children's college tuition, the continued payments of medical insurance and life insurance premiums, and how long the couple had been married to calculate the length of time for spousal support.
While most parents who are subject to support orders take them seriously and make every effort to comply with them, there are some who legitimately become unable to meet these obligations due to financial downturns such as a medical emergency or an unexpected job loss. In such cases they might want to have their attorney file a motion for an order modification with the court.