Spousal Support and Taxes

Spousal support often carries tax implications. If you are paying spousal support to an ex-spouse the payments may be tax-deductible. This is only if certain requirements are meant. On the other hand, child support and property division payments are not typically tax deductible. Certain types of payment are partially deductible, but cannot be deducted in full. This includes mortgage payments that you may be paying on behalf of your ex or other third-party payment expenses.

If you are receiving spousal support, then you may need to pay taxes on the income. Normally, the IRS considers all spousal support payments to be taxable income as well as all payments made to third parties on your behalf. For example, if your spouse is making your car payments, you will have to pay taxes on this because it is technically income that you are benefiting from.

It may help you to soften the tax blow by paying an estimated tax to the IRS each quarter. If you are working, you can increase the taxes automatically withheld from your paycheck. Not all payments are taxable. There are some payments, such as child support, non-cash property settlements, and pavements that are a part of your spouse's community property income, which may not be taxable at all.

You will want to talk with a lawyer prior to arranging all of these payments if you want more information. With the right attorney on your side, you will be capable of organizing your payments in order to avoid any serious tax complications. A Los Angeles divorce lawyer at Claery & Hammond is concerned with making sure that all divorce arrangements work to best satisfy your needs. Call today!