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There Are Tax Consequences to Alimony, But Not to Child Support
In your Florida divorce, one spouse may receive alimony or child support from the other. When that happens, you need to be aware of the tax consequences. Wouldn't it be great if we all got to take home all of the money we earn at work? Of course we can't because income tax is taken out.
While there are no income taxes to be paid for receipt of child support, there are income taxes to be paid on alimony.
There are many technical rules involved (After all, we are talking about the Internal Revenue Code.), but basically you can count on treating monthly payments of alimony as taxable income to the receiving spouse and tax deductible to the paying spouse. That makes a huge difference in the amount of money involved. If you are in the twenty percent tax bracket, $1,000 per month becomes $800. If you were planning your future based on the entire $1,000, you are in for a surprise.
It is very important to get the advice of an expert Florida divorce lawyer when there is alimony involved.
Bottom Line: Ask your Florida divorce lawyer about the tax consequences of paying or receiving alimony.
(copyright Stann Givens 2009)
Florida requires an equitable distribution of the marital property (what is fair, not necessarily equal). Each spouse keeps the property and debts that belonged to them before the marriage. Each spouse also keeps any property received as a gift or inheritance, or any property that the spouses agree to divide in a written agreement. Any property that was acquired before the spouses married or that was received as a gift or inheritance is not considered marital property. If the spouses cannot come to an agreement, a court will divide the property and the debt.
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"A Plain English Guide to Protecting Your Children"
Author: Mary L. Boland, Attorney at Law
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