AlabamaFamilyLawBlog.com » Alimony http://alabamafamilylawblog.com Mobile and Baldwin County, Alabama Divorce Lawyer Fri, 16 Dec 2011 15:42:17 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Periodic Alimony is Taxed http://alabamafamilylawblog.com/periodic-alimony-is-taxed.html http://alabamafamilylawblog.com/periodic-alimony-is-taxed.html#comments Fri, 24 Apr 2009 17:30:33 +0000 Alabama Divorce Lawyer, Jim Jeffries http://alabamafamilylawblog.com/?p=239 This recent article from The Oklahoman revisits some of the tax issues arising from divorce cases. According to the article and to my surprise, there are many divorcing spouses that do not realize that periodic alimony is included as income for tax purposes (don’t there lawyers explain this to them?). So, because taxes are not withheld, they are surprised in April to find out they owe taxes on all of the alimony received in a given year. The percentage will obviously depend on the recipient’s tax bracket.

My suggestion is to take 25% – 30% of each alimony check received and put it in a separate “tax account” to be used only at tax time to pay this obligation. I also recommend considering an ING Direct online account for this purpose. This account is currently paying 4% APR, which is better than most bank checking or savings accounts, and the money is liquid. Additionally, you link the ING account with your normal checking account and it is easy to make transactions into and out of the account online.

Also remember that if you want more in depth information, go to www.irs.gov and download publication 504, the tax guide for Divorced and Separated Individuals. Or you can access a pdf version here.

If you have any questions about the implications your divorce case will have on your tax situation, discuss it with your CPA or tax planner. The time to have that conversation is before the divorce is finalized.

]]> http://alabamafamilylawblog.com/periodic-alimony-is-taxed.html/feed 0 Am I Entitled to Receive Alimony? http://alabamafamilylawblog.com/alimony-am-i-entitiled-to-receive-alimony.html http://alabamafamilylawblog.com/alimony-am-i-entitiled-to-receive-alimony.html#comments Sat, 04 Apr 2009 01:59:59 +0000 Alabama Divorce Lawyer, Jim Jeffries http://alabamafamilylawblog.com/?p=29 Alimony is a payment, usually monthly, from one spouse to another for the continued support of that spouse after the divorce. It is separate and distinct from any amount ordered to be paid by one spouse to another as child support. As with most issues to be decided in a divorce, whether to award alimony is discretionary with the Court and is based individually on the facts of each case. Therefore, unfortunately for the divorcing parties, there is no fixed rule for determining whether to award alimony and, if so, how much to award. Some of the factors Courts in Alabama will consider when determining this issue are: (1) the financial need of the receiving spouse and the ability of the paying spouse to pay; (2) the length of the marriage; and (3) the conduct of the parties regarding the cause of divorce.

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