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Helton Law Firm, PLLC

The tax implications of child support and alimony

When a Tennessee resident gets a divorce, he or she may make both child support and alimony payments. An individual who is making payments to a former spouse may benefit from having as much of a given payment as possible classified as alimony. This is because it may qualify for a tax deduction. The recipient of an alimony payment would need to record it as income on a tax return.

Those who are offered a combination of child support and alimony may want to look at the tax implications before accepting any offer. It may also be a good idea to consider variables such as how old a child is or how long the marriage lasted before accepting an offer. Generally, a child's age will determine how long child support payments last while the length of the marriage may determine how long alimony must be paid.

It may also be worth considering who will be responsible for paying college tuition or other long-term educational expenses. If life and medical premium payments will be made by the other spouse, this may also help to determine if an offer is worth accepting. Alimony does count as earned income when it comes to contributing to an IRA. Therefore, accepting alimony payments may make it easier to save for retirement.

When a divorce settlement is created, it may be necessary to make sure that each party maintains a reasonable standard of living. It may also be necessary to keep the best interests of any children from the marriage in mind as well. An attorney may be able to help a person who may need guidance as it relates to paying spousal or child support. Legal counsel may also be able to answer questions about the tax implications of such payments.

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