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Divorce can be just as much an economic issue as an emotional one.
While many people poke fun at divorce attorneys, a good one might be
able to save you more money than you realize, while a bad one might
cost you thousands, and that's not just in the initial settlement.
Many tax issues for divorce revolve around the actual divorce
agreement. The two main financial issues that most people deal with in
divorce are alimony and child support. Child support payments are not
taxable to the person receiving the payments, and are likewise not
deductible by the person making the payments. Alimony payments, on the
other hand, are completely different. If a payment qualifies as
alimony, that payment is taxable to the person receiving the payment,
and deductible by the person making the payment.
Payments that are fixed as child support payments are not considered
alimony. A payment is fixed as child support if a divorce ruling
specifically designates an amount or part of a payment as support for a
child. This amount may vary from time to time. Child support payments
are neither tax deductible by the payer nor taxable to the payee. A
payment may be treated as fixed child support even if other separate
payments are specifically designated as child support.
Each individual state has guidelines which describe what child
support must include, unlike alimony. Your own agreement may vary from
the guidelines in your state, but only in rare circumstances is it
permissible for the total amount spent on your child to be lower than
the guidelines' minimum. In most situations, couples find that the
minimum amounts described in the guidelines are affordable, and many of
the divorce cases mediated find parents are willing to commit more than
the state requires so that they can provide more than the minimum for
their children.
When it comes to alimony and child support, if there is very little
money or income, child support will be considered first. The best
interest of the child is an important principle in divorce law, so
alimony is only discussed after the children's needs have been provided
for. As mentioned previously, the IRS treats child support and alimony
very differently.
Child support's main intention is to help pay for any expenses
involved in taking proper care of your children. This would include
household expenses such as food, rent, electricity, and other general
expenses such as transportation, laundry, and repairs. You are not
required to account for how the child support is being spent; however,
it is a good idea to keep records, since that will help you keep track
of whether the amount you are receiving is enough to cover the
necessary expenses.
Alimony and child support are important for a single parent when
getting their feet steady and starting their new life. An experienced
divorce attorney can help ease the somewhat complicated divorce
proceedings to make sure you and your children are provided for, and
can continue on with your lives.
Note: Fatherville never advocates
divorce as a solution to marital discord. Marriage is a commitment and
usually requires a lot of blood, sweat, and tears. But, as a last
resort, it is often wise to seek legal counsel. Are you a dad facing
divorce? Find a qualified Divorce Lawyer in your area through our nationwide network to assist you.
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