Tax Implications of Alimony

Divorce proceedings in Wake County family court may often involve the awarding of alimony payments.  Alimony and divorce has been previously looked at in earlier articles on our site.  Wake County family court is in charge of determining the amount of alimony as well as to whom it should be awarded. NC family law attorneys can be consulted during this process to make sure the resulting judgment by the court is fair to both spouses. While alimony may be confusing to understand on its own, alimony payments become even more complicated when spouses need to determine the tax implications of these payments as well.

Alimony awarded to one or the other spouse may carry with it complex tax implications. Alimony is paid to a “dependant spouse” from a “supporting spouse.” The spouse ordered to pay alimony (the supporting spouse) may be able to receive IRS tax deductions. Tax payments might need to be made on the alimony payments by the spouse who receives the payment (the dependent spouse).  NC family courts determine the duration, amount, and method of payment of the alimony. Other laws and regulations from the Internal Revenue Service (IRS) determine how the taxes must be paid.

NC family law attorneys can help spouses sort through the number of IRS criteria for the taxes on alimony payments. Taxes must be paid according to a wide variety of factors. These aspects may include the method of the alimony payment or the status of the marriage. In addition, the prior tax filings of both spouses may have an effect on what kinds of taxes are to be paid to the IRS. Finally, the amount of time over which the alimony is paid may also positively or negatively affect the taxes of either spouse.

Wake County attorneys bring knowledge and expertise to the table when spouses must go through divorce proceedings. While the divorce and alimony awards may initially be determined in Wake County family court, the future tax implications may continue to be confusing for many years afterward. Each personal process of a divorce may be complicated and often frustrating for the divorcing spouses to understand. It is possible to reach an appropriate amount of alimony in Wake County family court. A reasonable conclusion can be reached through experienced NC family law attorneys.