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Taxes Information |
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Tax Deduction for Alimony Payments? - Yes!
Over 50% of marriages end in divorce in the United States. Many divorce decrees include provisions for the payment of alimony. The IRS takes the position that such payments constitute a form of income and create an alimony tax deduction for the person making payments. According to the IRS, alimony payments are taxable to the recipient in the year received. In turn, the person paying the alimony can claim a deduction for the payments if the following tests are met: 1. You and your spouse or former spouse do not file a joint return with each other, 2. You pay in cash (including checks or money orders), 3. The divorce or separation instrument does not say that the payment is not alimony, 4. If legally separated under a decree of divorce or separate maintenance, you and your former spouse are not members of the same household when you make the payment, 5. You have no liability to make any payment (in cash or property) after the death of your spouse or former spouse; and 6. Your payment is not treated as child support. If you are receiving or paying alimony, you must use Form 1040 for your personal taxes. Regardless of income levels, deductions or miscellaneous tax issues, you cannot use Form 104A or Form 1040EZ. In preparing your tax return, the person receiving alimony will report the information on line 11 of Form 1040. That person must also provide their social security number to their former spouse or face a fine of $50. The person paying the alimony can claim the deduction on line 34a of Form 1040. Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
MORE RESOURCES: Benefits paid to suffering unemployed workers will have to be cut and taxes on struggling businesses will have to go up to pay for a staggering number of claims due to the recession, Wisconsin lawmakers were told Wednesday. The debate over school taxes in Hastings-on-Hudson has revealed the cultural and economic fault lines in the Westchester County river town. MANILA, Philippines - The country's next president will have to turn his back on populist promises made during the campaign and raise taxes sooner rather than later to prevent a financial crisis soon after the May elections. Waukee residents will pay slightly higher property taxes to the city under a budget that will take effect on July 1, though the city’s levy rate will not change from recent years. MANILA (Reuters) - The Philippines' next president will have to turn his back on populist promises made during the campaign and raise taxes sooner rather than later to prevent a financial crisis soon after the May elections. Moore County has advertised tax liens against Little River Golf Club and other properties of the resort for failing to pay about $220,000 in property taxes. A small jump in the tax levy, combined with a larger drop in property valuations, should result in a drop in taxes for most Bayport property owners. If President Obama's proposal to apply a Medicare levy to investment income had been in place in 2008, the Obamas would have paid roughly $75,000 more in taxes that year. Faced with failing to make annual $1 million payments promised to the owners of Reno's Triple-A baseball team, city officials propose to use sales taxes generated by a planned retail development near the stadium to cover the debt. With April 15 right around the corner, accountancy department chair Keith Smith has words of wisdom for students filing taxes. |
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