Jump to Navigation

Ensuring deductible alimony stays that way

When Texas couples divorce or separate, one of them often has to pay alimony to their ex. Many residents assume that the alimony will be deductible to the payee and that the receiver must report it as income. While this can be true, there are seven tax conditions that must be met for the alimony to be considered deductible, and even then, there are additional conditions that might affect what, if any amount, is actually deductible for the payee.

Some of the conditions that must be met for alimony to be considered deductible include the payment being part of an established divorce decree or settlement, being made to the receiver or on behalf of the receiving spouse. The others include when certain payments such as mortgage payments are made on behalf of said spouse, being a cash payment or its equivalent and that it cannot be considered fixed or deemed child support. The divorce settlement must stipulate that the obligation to pay alimony ends when the receiving party dies, and it must not state that the payment is not alimony. Finally, the exes cannot live in the same household or file a joint tax return after they are separated or divorced.

In a high-asset divorce, there is concern about front-loading alimony payments, which must then be recaptured for tax purposes. Front-loading payments means that the alimony payment deductibles are very high in the first two years and then must be recaptured in the third. In that case, the payee must report some of the deductions they took in the first two years, at which point the receiving spouse will get to claim the recaptured amount as deduction. Spreading alimony payments over more years might help with this problem.

When it comes to divorce and alimony, a person might benefit from the guidance of a lawyer with experience in this area. The lawyer might help with planning for the future, especially with financial matters.

No Comments

Leave a comment
Comment Information

Tell Us About Your Case

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

[Picture of Bruce Turner]

Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

Bruce Turner - Attorney Profile Subscribe to This Blog's Feed

Office Locations

Turner, Bruce E.
1603 Lyndon B. Johnson Freeway Suite 280
Dallas, TX 75234

Phone: 800-486-9553
Fax: 214-373-2570
Dallas Law Office Map

FindLaw Network
Bruce Turner with Bennett, Weston LaJone & Turner, P.C.

Attorney Bruce Turner is located in Dallas and represents people and businesses throughout DFW and the Metroplex, including Denton, Carrollton, Lewisville, Flower Mound, Farmers Branch, Irving, Las Colinas, Corinth, Highland Village, The Colony, Plano, Frisco, Allen, McKinney, Mesquite, Grand Prairie, Garland and Grapevine as well as Collin County, Denton County and Dallas County in Texas.

Privacy Policy | Business Development Solutions by FindLaw, a Thomson Reuters business.