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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: RIVERWOODS, Ill., Feb. 7, 2012 /PRNewswire/ -- As more and more baby boomers are reaching retirement age, they'll have many factors to consider in choosing where to live in retirement, including the tax ... NEW YORK (TheStreet) - Candidate Mitt Romney wants you to believe he will lower taxes while cutting the national debt. But President Romney will need to raise taxes if he is going to have any chance of lowering U.S. debt, according to his former private equity pals. Now a strong frontrunner for the Republican presidential nomination, Romney has repeatedly said that cutting the national debt ... WASHINGTON, Feb. 6 (UPI) -- Small U.S. business owners are unhappy with the amount of taxes large corporations and their executives pay, a recent survey indicates. When it comes to taxes, it seems that everyone has an opinion. Whether it's the way they're spent (or misspent), or whether we should pay less (or someone else should pay more), this surprisingly feisty ... With tax season getting under way, today I'll answer reader questions about property taxes, the new Medicare surcharge starting in 2013 and how to get those old-fashioned paper tax forms. Q: Tony G. asks, "Has anything... Small business owners see corporate tax loopholes and the shifting of U.S. profits to offshore tax havens as serious problems, according to a new independent national poll. Small business owners think big corporations and the wealthy don’t pay their fair share of taxes, the poll shows. Retirees can face hefty taxation if they don't follow certain strategies when managing their money. Using these tactics will help lower the bill. Kevin Drum looks at how regressive taxes are at the state and local level, an issue that doesn’t get nearly enough attention. These strange taxes are making everything from bagels to hot air balloon rides more expensive.  The proposed elimination of inheritance taxes would hit Lincoln County hard – to the tune of $550,000 a year, County Commissioner Joe Hewgley said. Hewgley testified to the Legislature on a bill that would eliminate inheritances taxes, something that Gov. Dave Heineman is fostering. |
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