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Alimony Received

You survived the divorce. Now you've got the IRS to deal with if you're getting alimony.

Ending a marriage is never a happy event. But at least you got a good settlement and those regular checks from your (insert your own description here) ex-spouse are completely warranted. They also are completely taxable.

Alimony, separate maintenance payments and similar recompense from your spouse or former spouse are taxable to you in the year you receive them. Child support money, however, is not taxable. If your divorce decree calls for both alimony and child support and specifies amounts for each, you only owe the IRS for the alimony payments.

If your divorce attorney was really, really good, those hefty post-marriage payments could produce a larger-than-expected tax bill when you file your return. Since the IRS doesn't have a mechanism for collecting taxes from alimony checks as you get them, you'll have to pay all taxes due on the income in a lump sum by April 15.

You can avoid this unwelcome tax surprise by making quarterly estimated tax payments on your alimony income. This Bankrate story explains the estimated tax process.

For more on what alimony payments mean to you as well as your ex, check out this tax tip. And this Bankrate article offers advice on how to maintain your credit and manage your finances after a divorce.

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