If you recently ended your marriage, you could have many different questions with respect to your finances. From property distribution to different ways in which your financial life will change after parting ways with your spouse, it is critical to have a clear understanding of what lies ahead. If you have to pay alimony or child support, it is pivotal to stay current. Some people wonder if they can deduct these payments when filing their taxes, and it is crucial to take a close look at this issue.
Some people have misconceptions regarding alimony, child support and their tax return. For example, some people are not sure whether these payments are deductible or if the payments that they receive count as income.
Alimony and your taxes
If you have to pay alimony, the Internal Revenue Service states that you cannot deduct alimony payments if the date of your divorce took place after 2018. However, people can deduct alimony payments (or have the obligation to include it in their income) in some instances. It is important to review IRS requirements with respect to which type of payments count as alimony or separate maintenance. For example, spouses must not file a joint return and the payment must not constitute child support.
Child support and your tax return
The IRS also says that child support payments are not deductible. Therefore, if you have to pay child support, you should realize this before approaching taxes. Additionally, if you receive child support payments as a custodial parent, you should note that these payments do not count as income.