The alimony deduction will be affected by tax reform. What does this mean for you as a recipient of alimony? What does it mean for you as the payor of alimony? There are some very important items you need to know regarding tax reform and how it affects your ability to deduct alimony on your tax return. We will take a look at the requirements in today's post so you know if you are eligible to list the payments as a deduction in California.
Spousal support is a common part of divorce in California. It is also known as alimony and is only paid by one person to the other person. It can be ordered by a court or it can be agreed upon by the divorcing couple and recorded in their arrangement. Once it is finalized, it will need to be followed or else the parties could find themselves in court. Here are some common uses for spousal support payments:
The process of moving on from divorce can prove particularly difficult, especially if you are not the primary income provider in your marriage. To address this frequent difficulty, and the prospect of transitioning into life as a single person with all the increase in expense that may bring, courts often award some form of alimony. Alimony awards intend to alleviate the financial pressures of divorce on a spouse who does not have the resources to provide for him or herself, or as a measure of compensation to a spouse who sacrificed personal enrichment for the sake of a marriage.
Alimony laws have varied from state to state for years, making it necessary for couples considering divorce to look into the applicable laws in their state to understand how to fairly address the issue of spousal support. Depending on the nature of the divorce and the laws of the state where a divorce took place, the terms of alimony varied significantly from one couple to the next, but once fair terms were reached, paying spouse's could take some comfort in the tax breaks associated with paying support.