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
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.
Text by Kay
illustrations by Brandy Kesl.