overtherainbow
enthusiast
Reged: 10/23/04
Posts: 268
Loc: New England
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remember if you started to receive spousal support temporary or permanent you owe taxes on it and those taxes must be paid on a pay as you go system quarterly on estimated tax payments. So if you are receiving spousal support you need to send in an estimated tax payment by April 15th. If you do not know how to do that go to irs.gov and call the irs 800 number and they will calculate how much money you should send in for an estimated quarterly payment on your spousal support. They will also send the voucher and envelope to send the money. Do this today if you are receiving spousal support and have not started the estimated tax payments. If you don't you will get a whopping tax penalty next year. Don't ever mess with the irs. Child support is not taxable at all but alimony/spousal support/ temp. spousal support IS Taxable and taxes on it must be paid quarterly.
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Melody
Carpal \'Tunnel
Reged: 06/02/04
Posts: 10102
Loc: California
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I've been receiving alimony for the past several years.
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almostheaven
Carpal \'Tunnel
Reged: 07/13/04
Posts: 10468
Loc: West Virginia
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claim it on your taxes at the end of the year? As long as you've been doing that, you're ok. You don't HAVE to file quarterly; however, the IRS penalizes you on your final tax return if you didn't. It's not much, but it's more than you'd owe if you filed quarterly.
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Char Fox
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overtherainbow
enthusiast
Reged: 10/23/04
Posts: 268
Loc: New England
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Basically this is it. You have to pay 90% of the taxes you owe during the year to the IRS (pay as you go --like the taxes taken out of w-2)But alimony has NO taxes taken out of it like wages do. If at the end of the year you did not pay 90% of the pay as you go taxes you owe for that year (or 100% of last year's tax liability) during the year they will hit you with a penalty. Taxes are a pay as you go system --that's why taxes are taken out of your paychecks. If you have alimony checks USUAlly you have to pay quarterly estimated tax payments. Your situation may be such that you don't have to pay quarterly estimated tax payments if the amount you have withdrawn from your wages covers 90% of your tax liability. But ya gotta figure it out IN ADVANCE to make sure that you are paying in at least 90% of your liability in order to avoid the penalties. Don't mess with the IRS. The amount you are paying them during the year has to equal 90% of your tax liability or 100% of last years tax.
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Melody
Carpal \'Tunnel
Reged: 06/02/04
Posts: 10102
Loc: California
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I include it on the 1040 form as income...that's it? Then why the quarterly payments? I don't get it.
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almostheaven
Carpal \'Tunnel
Reged: 07/13/04
Posts: 10468
Loc: West Virginia
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Over explains it well below. Do you end up owing tax at the end of the year or get a refund? If you get a refund, no problems, but if you owe, and you didn't file quarterly statements on it, they charge you a penalty. It gets added to the amount you owe. Whomever is doing your taxes may not point this out to you and just tell you that you owe X amount. But that amount is increased by a penalty the IRS tacks on if you owed them and didn't file quarterly. They want their interest for you holding it for the year IOW.
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Char Fox
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Melody
Carpal \'Tunnel
Reged: 06/02/04
Posts: 10102
Loc: California
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I have always gotten a refund, so I haven't had any of those quarterly payment penalties. I have heard that if you get too much of a refund, you could also have trouble. Do you know if that's true? Because the last two years, I've gotten back more than $3000 in Federal refund.
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almostheaven
Carpal \'Tunnel
Reged: 07/13/04
Posts: 10468
Loc: West Virginia
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I've never heard of that happening.
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Char Fox
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overtherainbow
enthusiast
Reged: 10/23/04
Posts: 268
Loc: New England
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The IRS doesn't care a rats ass about refunds. They care if you owe them more than 10% of the total tax liability. If you owe them more than 10% of the toal tax liability or if you did not pay in 100 per cent of last years tax liability you get hit with a penalty. You have to be careful in particular if you are recieiving large alimony checks and are having no money withheld (w-2) and have few exemptions/ deductions. In that situation--the new divorcee will get penalties on 2005 tax return for underpayment of tax. Just something to watch out for depending upon your individual situation. The more you owe the higher the penalty. If that is your situation ya gotta realize ya gotta sock away a portion of the alimony to pay the quarterly tax bill.If you don't know how much you can call the IRS and they will calculate it for you for the estimated payments--that's what I did. That's what I have to do--but my ex was high income and I am only working part time now--so I am getting substantial alimony. May not be everyone's situation. Just something for some women to be aware of. Also it is better for all women to learn how to do their own taxes. The tax prep places are rip offs. It isn't that hard to figure out. The computer tax programs are terrific and only cost about $30 -$40 bucks.
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aussie928
old hand
Reged: 10/29/04
Posts: 969
Loc: Dallas
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G'day luv. Heaven has it HALF right.
You are required to file quarterly taxes for alimony ONLY if BOTH of the following criteria are met.
If you expect at least $1000.00 in tax due (in other words you have to write a check to the IRS for this on tax day) AND you expect your withholdings and credits to be less then 90% of the tax due. Since you work (and therefore have taxes taken out) luv this should never apply to you. This usually only comes into play if this is the majority of your income. Very much like the self employed. You are NOT given a penalty for not filing quarterly taxes unless you have to write the IRS a check as described above. See IRS Pub 504. As to the refund Q.. I always get back at least this...will ask my XBIL who works for the IRS.
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